Table 5.4 -Refer to Table 5.4. If Outcomes 1 and 2 Are

question 106

Multiple Choice

Table 5.4

-Refer to Table 5.4. If outcomes 1 and 2 are equally likely at Job A, and if at Job B the $20 outcome occurs with probability .1, and the $50 outcome occurs with probability .9, then:

• A) Job A is safer because the difference in the probabilities is lower.
• B) Job A is riskier only because the expected value is lower.
• C) Job A is riskier because the standard deviation is higher.
• D) Job B is riskier because the difference in the probabilities is higher.
• E) There is no definite way given this information to tell how risky the two jobs are.

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Definitions:

Work In Process Inventory

Goods that are in the process of being manufactured but are not yet completed, representing a component of a company's inventory.

Finished Goods Inventory

Items that have been completed by the manufacturing process and are ready for sale to customers.

Control Accounts

General ledger accounts that summarize the balances of a group of subsidiary accounts, facilitating the organization and verification of financial information.

Costing System

A method used by businesses to determine the cost associated with producing a product or offering a service, taking into account factors like materials, labor, and overhead.