If One Project Has a Higher Standard Deviation Than Another

question 6

Multiple Choice

If one project has a higher standard deviation than another

• A) it has a greater risk.
• B) it has a higher expected value.
• C) it has more possible outcomes.
• D) it may be riskier, but this can only be determined by the coefficient of variation.

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Definitions:

Step-Down Method

A cost allocation method used in managerial accounting that allocates service department costs to other parts of an organization, including production departments.

Service Department Costs

Expenses incurred by support departments within a company, such as maintenance and administration, which do not directly produce goods or services but are necessary for operations.

Direct Method

A way of allocating service department costs directly to producing departments without any intermediate allocations, typically used in cost accounting.

Interdepartmental Services

Services provided between different departments within an organization, facilitating internal operations and support.