The Decision-Making Pitfall That Favors Programmed Solutions Based on What

question 32

Multiple Choice

The decision-making pitfall that favors programmed solutions based on what worked in the past, even though that may no longer be relevant, reflects

• A) overlooking important constituencies.
• B) a bias toward objective data.
• C) the "if it isn't broke, don't fix it" syndrome.
• D) premature evaluation.

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Definitions:

Predetermined Overhead Rate

A rate used to allocate indirect costs to products or services, based on estimated overhead costs and an allocation base.

Direct Labor-hours

The sum of time spent by employees directly involved in the creation of a product, often used to allocate manufacturing costs.

Manufacturing Overhead

All indirect costs associated with the production process, including utilities, maintenance, and salaries of non-direct labor.

Predetermined Overhead Rate

A rate used to allocate indirect costs to products or services, calculated before the accounting period begins based on estimated costs and activity levels.