5-For-1 Pizza Is Operating at the Point Where the Supply

question 108

Multiple Choice

5-for-1 Pizza is operating at the point where the supply curve intersects the demand curve. If the owner decides to increase the price and not change the production level, what will result?

• A) A shortage
• B) A surplus
• C) More profit
• D) A shift in the supply curve
• E) A shift in the demand curve

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Definitions:

Variable Overhead

Costs that vary with the level of production or business activity, such as utilities or raw materials.

Materials Price Variance

The variance between the real expenses incurred from direct materials in manufacturing and the anticipated standard cost of those materials.

Labor Rate Variance

The discrepancy between what labor actually costs and what was originally forecasted or considered standard.

Variable Manufacturing

Costs that change in direct proportion to changes in the volume of production output.