When the Total Quantity of Unsold New Chevrolets Increases from 50,000

question 60

Multiple Choice

When the total quantity of unsold new Chevrolets increases from 50,000 to 75,000

• A)the economy experiences a period of disinvestment.
• B)the economy's level of competition increases.
• C)there is an increase in the rate of aggregate output.
• D)the producer undergoes an inventory investment.

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Definitions:

Variable Overhead Efficiency Variance

The difference between the actual variable overhead incurred and the standard variable overhead based on the actual level of activity, reflecting efficiency in using overhead resources.

Variable Overhead Efficiency Variance

The difference between the actual variable overhead costs incurred and the standard variable overhead costs, based on efficient use of resources.

Labor Rate Variance

The difference between the actual hourly wage paid to workers and the expected (or standard) wage rate, multiplied by the total hours worked.

Variable Overhead Rate Variance

Variable overhead rate variance is the difference between the actual variable overhead costs incurred and the expected (standard) costs, influenced by fluctuations in production activity levels.