Which of the Following Is True About the Use of the Representativeness

question 142

Multiple Choice

Which of the following is true about the use of the representativeness heuristic to make judgments?

• A) Use of the representativeness heuristic almost always leads to incorrect judgments.
• B) Use of the representativeness heuristic almost always leads to correct judgments.
• C) In many cases the representativeness heuristic leads to correct judgments, but it can also lead to biased judgments in other situations.
• D) The representativeness heuristic is used for solving well-defined problems, but is not relevant for making judgments.

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Definitions:

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the expected (or budgeted) variable overhead based on a standard rate.

Labor Efficiency Variance

measures the difference between the actual labor hours used and the standard labor hours expected for the production achieved, indicating labor efficiency.

Labor Efficiency Variance

A measure of the difference between the actual number of labor hours used and the standard number of labor hours expected to produce a certain level of output.

Materials Quantity Variance

The financial difference between the actual quantity of materials used in production and the standard expected quantity.