What Is the Effect of an Increase in the Desired

question 133

Multiple Choice

What is the effect of an increase in the desired confidence level on the number of observations necessary in a time study?

• A)increases
• B)decreases
• C)unaffected
• D)may increase or decrease, depending on the sample standard deviation
• E)impossible to say without additional information

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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) in the cost of a product.

Variable Costs

Additional costs incurred when unit production increases. Variable costs per unit usually are assumed not to vary with volume.

Inventory Costing Method

A system used to value inventory, often involving methods such as First-In, First-Out (FIFO) or Last-In, First-Out (LIFO).

Step-fixed Costs

Costs that remain constant for a certain level of activity, but can change when a new activity level is reached.