24)

The revenue that is forgone from an alternative use of an asset, such as cash, is called

a.sunk cost

b.opportunity cost

c.differential profit

d.differential revenue

21)

A favorable cost variance occurs when

a.actual costs are more than standard costs

b.actual costs are the same as standard costs

c.standard costs are more than actual costs

d.standard costs are less than actual costs

20)

Sage Company is operating at 90% of capacity and is currently purchasing a part used in its manufacturing operations for $17.00 per unit. The unit cost for the business to make the part is $22.00, including fixed costs, and $11.00, not including fixed costs. If 33,356 units of the part are normally purchased during the year but could be manufactured using unused capacity, the amount of differential cost increase or decrease from making the part rather than purchasing it would be a

a.$200,136 cost increase

b.$166,780 cost increase

c.$567,052 cost decrease

d.$200,136 cost decrease

18)

Sleep Tight, Inc., manufactures bedding sets. The budgeted production is for 41,800 comforters this year. Each comforter requires 1.5 hours to cut and sew the material. The cost of cutting and sewing labor is $11.40 per hour. Determine the direct labor budget for this year. $