Consider Paul's Decision to Go to College

question 122

Multiple Choice

Consider Paul's decision to go to college.If he goes to college,he will spend $90,000 on tuition,$15,000 on room and board,and $7,000 on books.If he does not go to college,he will earn $22,000 working at a construction job and he will spend $11,000 on room and board.Paul's cost of going to college is

• A)$96,000.
• B)$110,000.
• C)$114,000.
• D)$123,000.

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Definitions:

Standard Costs

Predetermined costs to manufacture a product or deliver a service, used for budgeting and performance evaluation.

Direct Materials Price Variance

The difference between the actual cost of direct materials used in production and the expected (or standard) cost.

Actual Costs

The genuine expenses that are incurred in the production or acquisition of goods and services.

Standard Costs

Predetermined cost estimates relating to how much it should cost to produce a product or provide a service under normal conditions.