Lucas Company Has Set Standards for the Manufacturing of Clay

question 31

Multiple Choice

Lucas Company has set standards for the manufacturing of clay pots to be 2 pounds of direct materials,per pot,at a cost of $3 per pound.During the current period,600 pounds of direct materials were purchased for $1,872.All of the direct materials were used to manufacture 295 pots.Lucas' direct materials price variance was

• A)$102 (U).
• B)$72 (U).
• C)$102 (F).
• D)$70 (U).

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Definitions:

Monopolistically Competitive

In a monopolistically competitive market, many firms sell products that are similar but not identical, allowing for competition based on quality, price, and branding.

Long-Run Equilibrium

A state in economics where all factors of production are fully adjusted to market conditions, leading to a steady state where no incentives exist for further adjustment.

Demand Curve

A graphical representation that displays the relationship between the price of a good or service and the quantity demanded by consumers over a period of time.

Average Total Cost

The sum of all production costs (both fixed and variable) divided by the amount of product made.