Pickrel Corporation Is an Oil Well Service Company That Measures

question 113

Multiple Choice

Pickrel Corporation is an oil well service company that measures its output by the number of wells serviced. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes. When the company prepared its planning budget at the beginning of November, it assumed that 27 wells would have been serviced. However, 31 wells were actually serviced during November.The amount shown for net operating income in the planning budget for November would have been closest to:

• A) $26,000
• B) $9,100
• C) $23,500
• D) $22,645

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Definitions:

Decision Processes

The methods, steps, or procedures involved in making choices or solving problems within an organizational or individual context.

Rationality

The quality or state of being reasonable, based on facts or reason rather than emotions or feelings.

Normative Decision Model

A leadership model suggesting the best course of action is dependent on certain norms, situations, or circumstances.

Participative Leadership

A leadership style where leaders involve team members in the decision-making process, enhancing engagement and commitment.