Teel Printing uses two measures of activity, press runs and book set-ups, in the cost formulas in its budgets and performance reports. The cost formula for wages and salaries is $4,200 per month plus $403 per press run plus $953 per book set-up. The company expected its activity in July to be 221 press runs and 128 book set-ups, but the actual activity was 218 press runs and 127 book set-ups. The actual cost for wages and salaries in July was $214,180.

The spending variance for wages and salaries in July would be closest to:

Multiple Choice

$1,067 U

$1,095 U

$1,067 F

$1,095 F

6. why the aggregate supply curve slopes upward in the short run in the short run, the quantity of output that firms supply can deviate from the natural level of output if the actual price level in the economy deviates from the expected price level. several theories explain how this might happen. for example, the misperceptions theory asserts that changes in the price level can temporarily mislead firms about what is happening to their output prices. consider a soybean farmer who expects a price level of 100 in the coming year. if the actual price level turns out to be 90, soybean prices will , and if the farmer mistakenly assumes that the price of soybeans declined relative to other prices of goods and services, she will respond by the quantity of soybeans supplied. if other producers in this economy mistake changes in the price level for changes in their relative prices, the unexpected decrease in the price level causes the quantity of output supplied to the natural level of output in the short run.