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The point has been reached where a biotechnology research and development company must expand by building a new facility. The search has been narrowed to four locations, all of which are acceptable to management. The assessment of these sites is being made on the basis of the six subjective location factors that follow. Management has agreed to use a five-point scale (Excellent = 5, Very good = 4, Good = 3, Fair = 2, Poor = 1) to quantify and compare their subjective opinions about the relative goodness of the sites. The weight reflects the importance of each factor in the decision.
Calculate the weighted score for each alternative. Which location would you recommend?
Fixed Manufacturing Overhead
The portion of total manufacturing overhead costs that does not vary with the level of production or output.
Budget Variance
The difference between budgeted and actual figures for revenues or costs, indicating the degree of control over business operations.
Budget Variance
The difference between the budgeted amounts and the actual amounts spent or received.
Fixed Overhead Volume Variance
The difference between the budgeted and actual quantity of units produced, multiplied by the fixed overhead rate per unit.
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