Calculate a Firm's Total Revenue (TR) Using the Following Information

question 203

Multiple Choice

Calculate a firm's total revenue (TR) using the following information: the unit price (P) for a product is $40; the quantity sold (Q) is 2,000; the fixed cost (FC) is $50,000; and the variable cost (VC) is $20,000.

• A)$10,000
• B)$50,000
• C)$110,000
• D)$150,000
• E)cannot be determined with the information provided

Interpret the relationship between actual and standard variable overhead costs.

Understand how to calculate materials price and quantity variances.

Understand and calculate the total variable overhead spending variance.

Understand the impact of actual vs. standard machine-hours on overhead variances.

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Definitions:

Direct Labor Hour

The actual time spent by workers directly producing a product or providing a service.

Actual Overhead

The actual amount of indirect costs associated with production, including utilities, maintenance, and factory overhead, incurred during a specific period.

Labor Rate Variance

A measure of the difference between the actual cost of labor and the budgeted or standard cost.

Direct Labor

Direct labor costs are the wages and benefits paid to employees who are directly involved in producing goods or providing services.