A Noisy Party That Keeps Neighbors Awake Is an Example

question 187

Multiple Choice

A noisy party that keeps neighbors awake is an example of a

• A) negative production externality.
• B) positive production externality.
• C) negative consumption externality.
• D) positive consumption externality.
• E) Both answers B and C are correct.

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Definitions:

Direct Labor Rate Variance

The difference between the expected cost of direct labor and the actual cost incurred, based on the rate paid per hour.

Direct Labor Time Variance

The difference between the actual time spent on production and the estimated standard time, multiplied by the standard labor rate.

Direct Labor Rate Variance

The difference between the actual cost of direct labor and the expected (or budgeted) cost, based on standard rates and actual hours worked.

Actual Costs

The real financial expenditures that a company incurs, as opposed to budgeted or estimated costs.