Which One of the Following Best Illustrates an Error Which

question 11

Multiple Choice

Which one of the following best illustrates an error which you, as a manager, might make due to overconfidence?

• A) Overestimating the best outcome expected from a project while underestimating the possibility of a less favorable outcome.
• B) Assuming that a new project will be profitable since similar projects in the past were successful.
• C) Assuming that your expectations of the future outcome from a project are more accurate than the expectations of others within your organization.
• D) Listening to the advice of subordinates with whom you agree while ignoring the advice of subordinates with whom you tend to disagree.
• E) Downplaying the cost of future failure of an existing project since the project has already paid for itself.

---

Definitions:

Factory Overhead Account

An account that aggregates all indirect manufacturing costs, such as utilities and maintenance, associated with producing goods in a factory.

Applied Overhead

The process of allocating estimated overhead costs to specific jobs or production units based on a predetermined rate or formula.

Incurred

Refers to costs or expenses that have been consumed, used, or sustained in conducting business activities.

Overapplied Overhead

A situation where the applied manufacturing overhead cost is more than the actual overhead cost incurred, resulting in a need for adjustment in accounting records.