Risk and Opportunity

question 101

Multiple Choice

Risk and opportunity:

• A)Both increase throughout the project life cycle.
• B)Vary inversely throughout the project life cycle.
• C)Both decrease throughout the project life cycle.
• D)Do not vary throughout the project life cycle.

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Definitions:

Production

The process of creating goods or services by combining labor, materials, and machinery.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to products by estimating overhead costs before production begins.

Machine Hours

Machine Hours represent a measure of the amount of time a machine is operated, used in costing, and operational efficiency analysis.

Over/Underapplied Overhead

The difference between the actual overhead costs incurred and the overhead costs allocated to production, indicating whether the allocated amount was too high or too low.