Question
22. Which of the following situations is most likely to result in a favourable selling price variance? A. The sales director decided to change from
22. Which of the following situations is most likely to result in a favourable selling price variance?
A. The sales director decided to change from the planned policy of market skimming pricing to one ofmarket penetration pricing.
B. Fewer customers than expected took advantage of the early payment discounts offered.
C. Competitors charged lower prices than expected, therefore selling prices had to be reduced in orderto compete effectively.
D. Demand for the product was higher than expected and prices could be raised without adverse effectson sales volumes.
23. A company uses a standard absorption costing system. Last month budgeted production was 8,000 units and the standard fixed production overhead cost was $15 per unit. Actual production last month was 8,500 units and the actual fixed production overhead cost was $17 per unit. What was the total adverse fixed production overhead variance for lastmonth?
A. $7,500
B. $16,000
C. $17,000
D. $24.500
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