If She Feels the Chances of Low, Medium, and High

question 24

Multiple Choice

If she feels the chances of low, medium, and high compliance are 20%, 30%, and 50% respectively, what are the expected net revenues for the number of assistants she will decide to hire?

• A)$26,000
• B)$46,000
• C)$48,000
• D)$50,000
• E)$76,000

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Definitions:

Machine Hour

A unit of measure representing the operation of a machine for one hour, used in allocating manufacturing costs based on machine usage.

Plantwide Overhead Rate

A single rate used to allocate manufacturing overhead costs to all units produced, regardless of the product line.

Cost Driver

A factor that causes the cost of an activity or process to change, used in activity-based costing to allocate costs.

Dual Rate

A cost allocation method that separates costs into fixed and variable elements, applying different rates for each in costing calculations.