Steve Is Part of a Production Team That Has Researched

question 98

Multiple Choice

Steve is part of a production team that has researched and chosen a new manufacturing process to improve product quality. He has discovered data that disputes some of the claims of the production team but decides to ignore the information and support the team's original decision. Steve is being adversely influenced by

• A)the illusion of control.
• B)organizational learning.
• C)groupthink.
• D)devil's advocacy.
• E)representative bias.

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Definitions:

Fixed Manufacturing Overhead

Costs in the manufacturing process that do not change with the level of production, such as rent, salaries, and depreciation.

Budget Variance

The difference between what was budgeted for and what was actually spent or received.

Volume Variance

The difference between the planned level of production volume and the actual production volume, often relating to overhead costs.

Predetermined Overhead Rate

The rate used to assign overhead costs to products or services based on a predetermined formula.