If the Actual Price of Direct Materials Is $10 Per

question 37

Multiple Choice

If the actual price of direct materials is $10 per unit while the standard price of the direct material is $11,

• A)The direct materials quantity variance will be favorable
• B)The direct materials quantity variance will be unfavorable
• C)The direct materials price variance will be favorable
• D)The direct materials price variance will be unfavorable

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Definitions:

Private Good

A product or service that is excludable and rival in consumption, meaning only those who pay for it can consume it, and one person’s consumption prevents another's.

Common Resource

A type of good that is non-excludable but rivalrous, meaning it's available to everyone but its consumption by one individual diminishes its availability for others.

Tragedy of the Commons

A situation where individual users, acting independently according to their own self-interest, deplete or spoil shared resources, even though it is not in anyone's long-term interest.

Social Incentives

Motivations that influence an individual's behavior based on social factors, including approval, respect, or the desire to be part of a community.