Which of the Following Statements Is True About the Administrative

question 32

Multiple Choice

Which of the following statements is true about the administrative model of decision making?

• A) It suggests that most managers make decisions rationally and logically.
• B) It suggests that decisions that are based on instincts are better than the ones based on logic.
• C) It suggests that managers tend to satisfice when making decisions.
• D) It suggests that managers have the most accurate information about decision situations.
• E) It suggests that managers should not make decisions based on mathematical analysis.

---

Definitions:

FOH Budget Variance

The difference between the actual factory overhead costs and the budgeted or standard overhead costs allocated for a period.

Labor Efficiency Variance

The difference between the actual hours worked and the expected hours worked, valued at the standard labor rate.

Labor Rate Variance

The variance between the real labor cost and the anticipated (or norm) cost, calculated based on the working hours.

Materials Quantity Variance

A calculation of the difference between actual material usage and expected usage in production, multiplied by the standard cost for each unit.