Cabot Company Collected the Following Data Regarding Production of One

question 91

Multiple Choice

Cabot Company collected the following data regarding production of one of its products. Compute the direct materials cost variance.

• A) $6,000 favorable.
• B) $3,570 unfavorable.
• C) $2,430 favorable.
• D) $6,000 unfavorable.
• E) $3,570 favorablE.Actual units at actual cost = $483,570

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Definitions:

Marginal Revenue

The additional income generated from selling one more unit of a product or service.

Profit-Maximizing

A strategy or point where a firm produces at a level where its marginal cost equals marginal revenue, maximizing its profit.

Economic Losses

Financial losses incurred by businesses or individuals, often resulting from poor investment decisions, decreased demand, or external factors affecting the market.

Perfectly Competitive Market

A market structure characterized by many buyers and sellers, homogeneous products, and free entry and exit, where no single entity can influence the market price.