Claire Company Uses a Standard Costing System

question 83

Multiple Choice

Claire Company uses a standard costing system. The following information pertains to direct labor costs for February: What is the total labor budget variance for Claire Company?

• A) $18,000 F
• B) $12,000 F
• C) $18,000 U
• D) $12,000 U

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Definitions:

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, as the scale of operations and output increases.

Making a Profit

The financial gain obtained when the revenue generated from a business activity exceeds the expenses, taxes, and costs associated with maintaining the operation.

Breaking Even

The point at which total costs and total revenue are equal, meaning no net loss or gain has been made.

Taking a Loss

A situation where a business or individual sells an asset for less than its purchase price, resulting in a financial deficit.