Hogwarts Company Has Developed Ideal Standards for Four Activities: Labor

question 77

Multiple Choice

Hogwarts Company has developed ideal standards for four activities: labor, materials, inspection, and receiving. Information is as follows:
The actual prices paid per unit of each activity driver were equal to the standard prices. The non-value-added costs for labor are

• A) $198,000.
• B) $34,000.
• C) $42,000.
• D) $31,000.

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Definitions:

Production

The process of creating goods or services by combining various inputs like labor, materials, and technology.

Total Revenue

The total income a firm receives from selling its products or services, calculated by multiplying the price per unit by the number of units sold.

Marginal Cost

Is the cost of producing one additional unit of a good or service.

Least-cost Combination

An optimal mix of inputs that minimizes the cost of production while yielding a given level of output.