A Cement Manufacturer Has Supplied the Following Data: If

question 4

Multiple Choice

A cement manufacturer has supplied the following data: If the company increases its unit sales volume by 5% without increasing its fixed expenses, then total net operating income should be closest to:

• A)$5,000
• B)$123,100
• C)$105,000
• D)$102,500

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Definitions:

Revenue Price Variance

The difference between the actual revenue generated by selling a product at its current price and the expected revenue at a predetermined price.

Direct Materials Price Variance

Direct materials price variance is the difference between the actual cost of materials and the standard cost, multiplied by the quantity of materials purchased.

Standard Price

A predetermined cost that management expects to pay under normal conditions for a specific quantity of goods or services.

Unfavorable Staff Time Variance

A discrepancy where the actual hours worked by employees exceed the planned or standard hours, typically leading to higher costs.