Based on Experience, the Manager at the Giraffe Hotel Decides

question 49

Multiple Choice

Based on experience, the manager at the Giraffe Hotel decides to accept a reservation for a party of 12 guests knowing that his hotel is sold out. She is accepting the reservation because

• A) She can cancel the reservations of the 12 lowest-paying guests and get more revenue from the new guests.
• B) She can make arrangements with the neighboring hotel to accept the 12 guests.
• C) She is using overbooking techniques and has determined that she can safely accept the 12 guests.
• D) She knows she will have 6 cancellations and 6 no-shows among the current reservations.

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Definitions:

Work in Process Inventory

The value of materials, labor, and overhead costs for products that are partially completed in the manufacturing process.

Overapplied Overhead

A situation in cost accounting where the allocated manufacturing overhead costs are more than the actual overhead costs incurred.

Underapplied Overhead

Occurs when the allocated or applied overhead costs in the production process are less than the actual overhead costs incurred.

Manufacturing Overhead Account

An accounting category that records the indirect costs associated with producing goods, such as utilities for the factory or salaries for the maintenance staff.