If the Direct Materials Purchased Is $200 Per

question 167

Multiple Choice

If the direct materials purchased is $200 per

• 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)there will be no direct materials price variance.

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Definitions:

Competitive Price-searcher Firm

A business that operates in a market where firms have some degree of control over the prices they charge, often because of product differentiation.

Entry Barriers

Obstacles that make it difficult for new competitors to enter a market, including high startup costs, strict regulations, and established brand loyalty.

Competitive Price-searcher Market

A market structure where firms have some control over the pricing of their products because their products are differentiated, but there is intense competition due to low entry barriers.

Economic Profit

The total revenue of a business minus both explicit and implicit costs.