A Company Uses Milk in Producing Its Product

question 3

Multiple Choice

A company uses milk in producing its product.If the price of milk doubles,which variance is directly impacted?

• A)Materials price variance
• B)Materials efficiency variance
• C)Labor price variance
• D)Labor efficiency variance

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Definitions:

Opportunity Cost

Opportunity cost is the cost of foregoing the next best alternative when making a decision, representing the benefits that could have been gained by choosing the alternative option.

Opportunity Cost

The expense associated with not choosing the second-best option when deciding.

Opportunity Cost

The value of the next best alternative foregone as a result of making a decision.

Point E

typically used in the context of graphs, it can represent a specific equilibrium point or any designated point of interest.