Lipton Makes Several Easy-To-Prepare Side Dishes That All Use Macaroni

question 52

Multiple Choice

Lipton makes several easy-to-prepare side dishes that all use macaroni shells.In promoting this product line,Lipton offers a 50-cents-off coupon that can be used for any of its macaroni-based mixes.Therefore,what must Lipton consider when pricing its mixes?

• A) joint costs
• B) potential (or basing)costs
• C) bundling costs
• D) differential costs

---

Definitions:

Materials Price Variance

The difference between the actual unit price paid for an item and the standard price, multiplied by the quantity purchased.

Standard Quantity

The expected or established quantity of materials or labor expected to be used during a manufacturing process or production cycle.

Standard Price

Standard price is the pre-determined cost that a company expects to pay for goods, materials, or services, used in budgeting and cost control.

Actual Output

Actual output is the real quantity of goods or services produced by a company or economy, as opposed to planned or theoretical outputs.