Vanstraten Corporation Has Provided the Following Data Concerning Its Two

question 10

Multiple Choice

Vanstraten Corporation has provided the following data concerning its two products:
The profitability index for product Z63Z is closest to:

• A) $4.20 per gram
• B) 0.53
• C) 0.20
• D) 0.57

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Definitions:

Efficiency Variance

A measure in cost accounting used to assess the efficiency with which inputs are converted into outputs, often looking at differences in labor or material usage.

Direct Labor-Hours

The total hours worked by employees directly involved in the production process, used as a measure for allocating labor costs to products or services.

Variable Overhead

Costs of indirect manufacturing that change with the level of production output, such as utilities for the manufacturing plant.

Efficiency Variance

The difference between the actual amount of input (time, materials, etc.) used in production and the standard amount expected to be used.