Which of the Following Is an Example of Collusion

question 21

Multiple Choice

Which of the following is an example of collusion?

• A) Nike and Reebok compete on price.
• B) Dell and Gateway compete on quantity.
• C) American Airlines and United Airlines agree to raise prices.
• D) Coca-Cola and Pepsi do not attempt to fix prices.
• E) Verizon builds more cell phone towers.

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Definitions:

Standard Activity

A benchmark or base level of activity used for planning, measuring, and controlling performance.

Quantity Standard

A preset benchmark that specifies the expected amount or number of units to be used or produced under normal conditions.

Variable Manufacturing Overhead

The portion of manufacturing overhead costs that varies with the level of production output, such as utility costs or indirect materials.

Labor Rate Variance

The difference between the actual hourly labor rate and the standard rate, multiplied by the number of hours worked during the period.