The Difference Between Actual Price Per Unit of Input and the Standard

question 161

Multiple Choice

The difference between actual price per unit of input and the standard price per unit of input results in a:

• A)Standard variance.
• B)Quantity variance.
• C)Volume variance.
• D)Controllable variance.
• E)Price variance.

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Definitions:

Shut Down

In economics, a short-run decision not to produce anything during a specific period because of current market conditions.

Short Run

A period in which at least one factor of production is fixed, and firms can adjust only to a limited set of variables.

TR < TVC

This expression denotes a situation where Total Revenue (TR) is less than Total Variable Costs (TVC), indicating a loss-making scenario for the business.

Minimum AVC

The lowest point of the average variable cost curve where each unit of production is at its cheapest.