When Calculating a Moving Average of a Data Set with a Natural

question 3

Multiple Choice

When calculating a moving average of a data set with a natural cycle of 6 months, what should be the length of the period?

• A) 4
• B) 12
• C) 6
• D) 2

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Definitions:

Standard Direct Labor-Hours

The estimated amount of labor hours required to produce a unit of product, used in budgeting and variance analysis.

Denominator Level

The activity level used to compute a predetermined overhead rate, often reflecting capacity or expected usage.

Budget Variance

The difference between budgeted figures for a set period and the actual figures achieved.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the standard cost allocated for the actual level of activity.