A Manufacturer Sells Watches for $60 Per Unit

question 228

Multiple Choice

A manufacturer sells watches for $60 per unit. The fixed costs related to this product are $10,000 per month, and the variable costs are $40 per unit. Which of the following is the equation for the profit function where x denotes the number of watches produced and sold? ​

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Definitions:

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the expected quantity, multiplied by the standard cost per unit.

SQ × AP

The standard quantity times actual price formula, used in cost accounting to calculate the variance between the actual cost and the standard cost of raw materials.

Direct Materials Price Variance

The difference between the actual cost and the standard cost of direct materials used in production, indicating how effectively the materials budget is being adhered to.

Per-Unit Standards

Estimates of the direct materials, direct labor, and manufacturing overhead costs required to produce one unit of a product.