Figure 4 Shannon Ltd.'s Standard Cost Card Contained the Following Information

question 66

Multiple Choice

Figure 4
Shannon Ltd.'s standard cost card contained the following information:
Direct labour: 1.25 hours x £8.00 per hour = £10.00
Shannon planned to make 12,000 units. Shannon actually made 10,000 units using 13,000 hours.
-Refer to Figure 4. Shannon's standard hours allowed for production was

• A) 12,500
• B) 15,000
• C) 16,250
• D) 13,000

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Definitions:

Average Product

The output per unit of a particular input, such as labor or capital.

Substitution Effect

The change in consumption patterns due to a change in relative prices, leading consumers to substitute one good for another.

Wage Increase

An upward adjustment in the salary or earnings paid to an employee.

Utility Maximizing

Acting in a way to achieve the highest level of satisfaction possible with available resources.