Biscuit Company Has Developed the Following Standards for One of Its

question 97

Multiple Choice

Biscuit Company has developed the following standards for one of its products. Direct labor hours is the driver used to assign overhead costs to products. The company records materials price variances at the time of purchase.
The variable manufacturing overhead efficiency variance is

• A) $1,000 favorable.
• B) $2,000 favorable.
• C) $1,000 unfavorable.
• D) $3,000 unfavorable.

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Definitions:

Monopolist

A monopolist is a single supplier in a market who has significant control over prices and the availability of a product or service.

Economies of Scale

Economies of scale are cost advantages that enterprises obtain due to size, output, or scale of operation, with cost per unit of output generally decreasing with increasing scale.

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, as the scale of operation increases with the reduction in average costs.

Fixed Costs

Fixed costs are business expenses that remain unchanged regardless of the level of production or sales, such as rent, salaries, and insurance premiums.