Which of the Following Illustrates the Concept of Delay of Gratification

question 47

Multiple Choice

Which of the following illustrates the concept of delay of gratification?

• A) preferring $500 now rather than $1,000 one year from now
• B) preferring $1,000 one year from now rather than $500 now
• C) preferring a 1-in-1,000 chance at $10,000 rather than $10 for certain
• D) preferring $10 for certain rather than a 1-in-1,000 chance at $10,000

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Definitions:

Fixed Overhead Volume Variance

The difference between the budgeted and applied fixed manufacturing overhead, based on the standard volumes expected to be produced.

Standard Quantity

The expected quantity of materials or inputs required for production under normal conditions.

Standard Hours Allowed

The amount of time that should be spent on producing a certain number of units under normal conditions.

Denominator Activity

A term used in cost accounting to refer to the level of activity used to allocate fixed costs to cost units.