Concerned by Recent Negative Trends in Economic Indicators Such as the Consumer

question 36

Multiple Choice

Concerned by recent negative trends in economic indicators such as the Consumer Price Index, Gross Domestic Product, and Inflation, the marketing manager of Kevin's Kayaks recommends that the company reduce its advertising spending.His recommendation is based on ________ data.

• A) Microeconomic
• B) Macroeconomic
• C) Government
• D) Numerological
• E) Incomplete

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Definitions:

Direct Labor-Hours

An alternative term for direct labor-hour, referring to the labor time spent by employees directly on manufacturing a product.

Materials Price Variance

The difference between the actual cost of materials purchased and the expected (standard) cost times the actual quantity of materials used.

Direct Materials Purchases Variance

The difference between the budgeted cost of materials that should have been purchased for the production volume and the actual cost of materials purchased.

Variable Overhead

Costs that fluctuate with production levels, such as utility bills or raw material costs, that are not directly tied to manufacturing.