The Activity Director for City Recreation Is Planning an Activity

question 73

Multiple Choice

The activity director for City Recreation is planning an activity.She is considering alternative ways to set up the activity's cost structure.Select the incorrect statement from the following.

• A) If the director expects a low turnout, she should use a fixed cost structure.
• B) If the director expects a large turnout, she should attempt to convert variable costs into fixed costs.
• C) If the director shifts the cost structure from fixed to variable, the level of risk decreases.
• D) If the director shifts the cost structure from fixed to variable, the potential for profits will be reduced.

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Definitions:

Variance

A measure of the dispersion or spread in a set of data points, indicating how much the numbers in the dataset differ from the mean.

Probability

A measure of the likelihood of a specific outcome or event occurring.

Crash Cost

The extra costs incurred to reduce the time of project activities in project management to accelerate project completion.

Normal Duration

The typical amount of time expected under normal conditions to complete a task or process, often used in project planning and scheduling.