A Stairwell in a Certain Office Building Is Always Congested

question 48

Multiple Choice

A stairwell in a certain office building is always congested at 12:00 p.m.and 2:00 p.m.The congestion is so bad that people have been complaining to the building's owner.Which of the following methods would be the most efficient way of reducing congestion?

• A) Assign each person in the building a time when they are allowed to use the stairwell.
• B) Encourage people to voluntarily keep off the stairwell during peak times.
• C) Charge everyone who uses the stairwell when it is congested the same fee.People who value the use of the stairs the most will be the ones who use the stairwell at peak times.
• D) Hold a lottery to determine who wins the right to use the stairwell at peak times.

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Definitions:

Variable Overhead

This consists of expenses that vary with production output, including costs not directly tied to manufacturing but essential for operation.

Labour Efficiency Variance

The difference between the actual labor hours used and the standard labor hours set for the production level achieved.

Incremental Cost Approach

A decision-making process focusing on the costs that change with the level of production or the introduction of a new process.

Net Present Value

The difference between the present value of an investment project’s cash inflows and the present value of its cash outflows.