Consider the Following Game

question 102

Multiple Choice

Consider the following game. You roll a six-sided die and each time you roll a 1, you get $50. For all other outcomes you pay $10. Since the expected value of this game is $0, the game is called a(n)

• A) gamble.
• B) fair bet.
• C) even game.
• D) zero sum game.

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Definitions:

Materials Price Variance

The difference between the actual cost of materials and the expected cost multiplied by the quantity of materials used.

Unfavorable

A term used to describe a variance or difference that negatively impacts financial performance.

Labor Rate Variance

The difference between the expected cost of labor at standard rates and the actual cost of labor incurred.

Raw Materials Quantity Variance

The difference between the expected amount of raw materials required for production and the actual amount used, evaluated in terms of cost.