When We Have Very Unequal Sample Variances, We Should

question 26

Multiple Choice

When we have very unequal sample variances, we should

• A) check our work very carefully when we pool the variances.
• B) not pool the variances.
• C) average the variances, but not weight them with the degrees of freedom.
• D) run some different analysis.

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Definitions:

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead cost to products or job orders, based on expected overhead costs and a chosen allocation base.

Variable Component

A variable component refers to a part of a cost or expense that varies directly with the level of output or activity.

Fixed Component

A portion of total costs that remains constant, regardless of changes in the production level or sales volume.

Underapplied

A situation where the allocated manufacturing overhead costs are less than the actual overhead costs incurred.