The Tendency to Overestimate the Contribution of Internal Factors Is

question 18

Multiple Choice

The tendency to overestimate the contribution of internal factors is part of which perceptual bias?

• A) Projection
• B) Self-serving bias
• C) The halo effect
• D) Figure ground
• E) Selective perception

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Definitions:

Favorable Variances

Differences between actual and budgeted financial performance that result in a better-than-expected financial position.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels, providing a more useful tool for performance evaluation.

Variable Costs

Costs that vary directly with the level of production or business activity. Examples include raw materials, packaging, and direct labor.

Fixed Costs

Fixed Costs are business expenses that remain constant regardless of the volume of goods or services produced, such as rent, salaries, and loan payments.