In 1977, Kenneth H

question 171

Multiple Choice

In 1977, Kenneth H. Olsen, then president of Digital Equipment Corp., announced that there was no reason for individuals to have a computer in their home. Long since disproven, this is an example of

• A)overestimation of uncertainty.
• B)excellent forecasting.
• C)underestimation of uncertainty.
• D)good prediction skills.

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Definitions:

Administrative Expenses

Costs related to the general operation of a company, such as executive salaries, office supplies, and legal fees.

High-low Method

A technique used in cost accounting to estimate variable and fixed costs based on the highest and lowest levels of activity during a period.

Contribution Margin

The amount by which the sale of a product exceeds its variable costs, indicating how much contributes towards covering fixed costs and generating profit.

Monthly Fixed Manufacturing Cost

Regular, unchanging costs incurred by a manufacturing facility each month regardless of the volume of production, such as rent, salaries, and insurance.