When a Manufacturing Company Has a Highly Automated Manufacturing Plant

question 86

Multiple Choice

When a manufacturing company has a highly automated manufacturing plant producing many different products, what is probably the most appropriate basis of applying overhead costs to work-in-process?

• A) Direct labor hours.
• B) Direct labor dollars.
• C) Machine hours.
• D) Cost of materials used.

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Definitions:

E(x)

The expected value of a random variable x, representing the mean or average outcome.

Variance

A measure of how much values in a dataset differ from the mean of the dataset, indicating the spread of data points.

Discrete Probability Distribution

A statistical function that describes the probability of occurrence of each value of a discrete random variable.

Discrete Random Variable

A variable that takes on a countable number of distinct values and is often used to model scenarios where outcomes are distinct and separate.