Data for Fuel Oil and Gasoline Purchased at Wholesale Prices

question 14

Multiple Choice

Data for fuel oil and gasoline purchased at wholesale prices for 2006 and 2010 are shown in the following table. What is Fisher's ideal index?

• A)116.69
• B)179.08
• C)111.97
• D)109.36

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Definitions:

Favorable Cost Variance

A situation where the actual cost of a product or service is less than its budgeted or standard cost.

Direct Materials Price Variance

The difference between the actual cost of direct materials used and the budgeted cost, based on the standard prices.

Direct Materials Quantity Variance

The deviation of the actual direct materials amount utilized in manufacturing from the expected standard amount, times the set cost per unit.

Standard Price

The predetermined cost of a single unit of product or service, used in budgeting and to measure efficiency.