Marcus Processes Four Different Products That Can Either Be Sold

question 18

Multiple Choice

Marcus processes four different products that can either be sold as is or processed further. Listed below are sales and additional cost data:
$\begin{array}{lrrr}&\text { Sales Value } & \text { Additional } & \text { Value after } \\&\text { with no further } & \text { Processing} & \text { further } \\\text { Product } & \text { Processing } & \text { Costs } & \text { processing } \\\text { Acta } & \$ 1,350 & \$ 900 & \$ 2,700 \\\text { Corda } & 450 & 225 & 630 \\\text { Limo } & 90 & 45 & 180\\\end{array}$ Which product(s) should not be processed further?

• A)Acta.
• B)Corda.
• C)Fando.
• D)Limo.
• E)None of the products should be processed further.

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Definitions:

Cost Variance

The difference between actual cost and the flexible budget at actual volumes.

Actual Cost

The incurred expenditure on materials, labor, and overhead necessary to produce a product or perform a service, reflecting the genuine expense.

Standard Cost

A pre-determined cost of manufacturing a product or delivering a service, calculated to help manage budgets and performance evaluations.

Unfavorable Variance

A situation where actual costs exceed budgeted or expected costs, often indicating a need for operational adjustments.