The Town of Isle Is on a Small Island Connected

question 135

Multiple Choice

The town of Isle is on a small island connected to Big City by a single bridge. Most of the residents of Isle work in Big City. As a result, the bridge becomes very congested for 2 hours each day at the typical morning and evening commute times. Which of the following policies considered by the mayor of Isle would likely be most effective in alleviating the congestion?

• A)A fixed toll for the bridge payable by every vehicle crossing the bridge at all days and times.
• B)A variable toll for the bridge payable only by vehicles crossing the bridge during the congested commute times.
• C)Any vehicle crossing the bridge at any time must have a sticker paid for with a one-time fee of $25.
• D)A press conference in which the mayor requests that people try to cross the bridge earlier or later than the typical commute times.

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Definitions:

Standard Direct Labour Rate

refers to the pre-determined cost per hour for direct labor, used in budgeting and measuring labor cost efficiency.

Labour Efficiency Variance

The difference between the actual hours worked and the standard hours expected to produce a certain number of units, multiplied by the standard hourly wage rate.

Actual Direct Labour Rate

This measures the actual cost per hour of labor directly involved in the manufacturing process.

Materials Price Variance

The difference between the actual cost of direct materials purchased and the standard cost, multiplied by the quantity purchased.