Fixed Costs That May Be Avoided in the Future Are

question 184

Multiple Choice

Fixed costs that may be avoided in the future are referred to as:

• A)replacement costs.
• B)opportunity costs.
• C)relevant costs.
• D)sunk costs.

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Definitions:

Materials Price Variance

The difference between the actual cost of materials and the standard cost, multiplied by the quantity purchased.

Ounces

A unit of weight commonly used in the United States and the United Kingdom, equal to one-sixteenth of a pound.

Labor

The human effort, both physical and intellectual, used in the creation of goods and services.

Labor Rate Variance

The difference between the actual labor costs and the standard labor costs expected for the actual production achieved.