Berends Corporation Makes a Product with the Following Standard Costs

question 201

Multiple Choice

Berends Corporation makes a product with the following standard costs: The company reported the following results concerning this product in April. The company applies variable overhead on the basis of direct labor-hours.The direct materials purchases variance is computed when the materials are purchased. The labor rate variance for April is:

• A)$4,224 F
• B)$4,224 U
• C)$4,096 U
• D)$4,096 F

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Definitions:

Price Competition

The process where businesses attempt to attract customers by undercutting each other's prices, commonly seen in markets with many sellers and homogeneous products.

Oligopolistic Producers

These are companies within an industry where a small number of firms hold a large market share, leading to limited competition and potentially collaborative market behaviors.

Monopolistically Competitive

Refers to a market structure where many firms sell products that are similar but not identical, leading to competition based on product differentiation.

Normal Profits

The minimum profit necessary for a company to remain competitive in the market, equivalent to the opportunity cost of capital.