If an Analysis Shows an Unfavorable Labor Rate Variance of $18,000

question 2

Multiple Choice

If an analysis shows an unfavorable labor rate variance of $18,000 and a favorable labor efficiency variance of $10,000,the entry to record the cost of direct labor and related variances would include:

• A)a debit to Labor Rate Variance for $18,000.
• B)a credit to Work in Process inventory for $18,000.
• C)a debit to Labor Efficiency Variance for $10,000.
• D)a debit to Cost of Goods Sold for $10,000.
• E)None of the answer choices is correct.

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Definitions:

Marginal Revenue

The extra revenue generated from the sale of an additional unit of a product or service.

Marginal Cost

Marginal cost is the cost of producing one additional unit of a good or service, crucial for decision-making processes in economics and business.

Average Total Cost

The total cost divided by the number of goods produced, representing the per-unit cost of production.

Profit-Maximizing Monopoly

A market condition where a single seller dominates, aiming to achieve the highest possible profit by controlling prices and output.