We Are Often Prone to Make Judgments on the Extent

question 38

Multiple Choice

We are often prone to make judgments on the extent to which the things we observe match our expectations of what we think things should be like while ignoring the mathematical probabilities of their occurrence. This error is known as the

• A)availability heuristic
• B)representativeness heuristic
• C)confirmation bias
• D)stereotypic bias

---

Definitions:

Variable Overhead Rate Variance

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

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the expected (standard) variable overhead based on actual production levels.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the standard overhead estimated, based on the actual level of activity.

Variable Overhead Efficiency Variance

The difference between the actual variable overhead incurred and the standard variable overhead based on the actual level of activity, reflecting efficiency in using overhead resources.