Use the Following to Answer Questions

question 266

Multiple Choice

Use the following to answer questions :
Figure: Strawberries and Submarines II
-(Figure: Strawberries and Submarines II) Look at the figure Strawberries and Submarines II. Assume that the economy is operating at point A. The opportunity cost of moving to point C is equal to _____ million tons of strawberries:

• A)800
• B)200
• C)2
• D)50

---

Definitions:

Variable Overhead

Costs that vary in direct proportion to changes in a firm's level of activity, such as utilities or raw materials.

Spending Variance

The difference between the actual amount spent in producing a certain number of units and the budgeted or standard amount expected to be spent.

Variable Overhead

The portion of overhead costs that varies directly with production volume, such as raw materials and labor hours.

Spending Variance

The difference between the actual amount spent and the budgeted amount for a cost or expense over a particular period.