If the Standard Quantity of Materials Is 84,500 Units @

question 11

Multiple Choice

If the standard quantity of materials is 84,500 units @ $0.15 per unit and the actual quantity is 95,000 units @ $0.12 per unit,then the materials price variance is:

• A)$2,850 Favorable.
• B)$1,575 Unfavorable.
• C)$1,275 Favorable.
• D)$2,850 Unfavorable.

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Definitions:

Recessionary Gap

The difference between the actual level of GDP and the potential GDP that could be produced if all resources were fully employed, indicating an economy is not reaching its full output potential.

Fiscal Policy

Government decisions on taxation and spending to influence the economy, aiming to manipulate demand, inflation, and economic activity.

Monetary Policy

A central bank's management of money supply and interest rates to achieve macroeconomic objectives like controlling inflation, consumption, growth, and liquidity.

Automatic Stabilizers

Strategies and programs intended to stabilize variations in a country's economic activities without direct involvement from government officials or policy makers.