Exhibit 5-5 AMR Is a Computer-Consulting Firm. the Number of New Clients

question 2

Multiple Choice

Exhibit 5-5
AMR is a computer-consulting firm. The number of new clients that they have obtained each month has ranged from 0 to 6. The number of new clients has the probability distribution that is shown below.
-Refer to Exhibit 5-5. The variance is

• A)1.431
• B)2.0475
• C)3.05
• D)21

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Definitions:

Planning Budget

A budget that outlines the expected revenues, expenditures, and resources over a specific period, serving as a financial roadmap for the organization.

Variable Cost

Costs that change in proportion to the level of activity or production volume of a company.

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the expected quantity, multiplied by the standard cost per unit.

Actual Usage

The real amount of resources consumed or utilized in the production of goods or provision of services.