In 2008,the Price of Soybeans Was $3

question 30

Essay

In 2008,the price of soybeans was $3.50 a bushel,and the Jones family farm planted 7,500 acres of them.In 2009,although the price of soybeans fell to $3.25 a bushel,the Jones family farm planted 8,200 acres of them.Use the concepts of a shift in the supply curve versus a movement along the supply curve to explain why this increase in soybean acreage does not represent a violation of the law of supply.

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Definitions:

Standard Costing

Standard costing is an accounting method that applies estimated costs to product costs for budgeting purposes and performance evaluation, facilitating variance analysis.

Variable Overhead

Costs that fluctuate with production levels, such as utilities or materials used in the manufacturing process.

Labour Efficiency Variance

A measure of the difference between the actual hours worked and the hours that should have been worked for the level of production achieved.

Overhead Spending Variance

The difference between the actual overhead expenses incurred and the overhead expenses budgeted or planned for a period.