Roth Is a Computer-Consulting Firm

question 47

Multiple Choice

Roth is a computer-consulting firm. The number of new clients that they have obtained each month has ranged from 0 to 6. The number of new clients has the probability distribution that is shown below. ​ The expected number of new clients per month is

• A) 6.
• B) 0.
• C) 3.1.
• D) 3.

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Definitions:

Absorption Costing

An accounting method that includes all manufacturing costs (direct materials, direct labor, and both variable and fixed overhead) as part of the cost base of a product.

Variable Costing

An accounting method that includes only variable production costs in product costs and treats fixed overheads as period costs.

Fixed Manufacturing Overhead

The sum of all regular, non-variable costs involved in manufacturing, including rent, salaries of permanent staff, and maintenance of equipment.

Absorption Costing

An accounting method that includes all manufacturing costs, such as direct materials, direct labor, and both variable and fixed manufacturing overhead, in the cost of a product.