A Binding Price Ceiling

question 208

Multiple Choice

A binding price ceiling
i.causes a surplus.
ii.causes a shortage.
iii.is set at a price above the equilibrium price.
iv.is set at a price below the equilibrium price.

• A) (ii) only
• B) (iv) only
• C) (i) and (iii) only
• D) (ii) and (iv) only

---

Definitions:

Raw Materials Quantity Variance

The difference between the actual quantity of raw materials used in production and the estimated quantity, which can indicate inefficiencies or savings in material usage.

Materials Quantity Variance

The variance between the real amount of materials consumed in the manufacturing process and the anticipated amount, with this difference being multiplied by the per unit standard cost.

Milk Chocolate

A type of chocolate that includes milk powder or condensed milk, giving it a milder flavor and creamier texture than dark chocolate.

Labor Efficiency Variance

The difference between the actual hours worked and the standard hours expected, multiplied by the standard hourly wage rate.