Exhibit 5-4

question 2

Multiple Choice

Exhibit 5-4.Consider the following probability distribution. Refer to Exhibit 5-4.The variance is _____.

• A)1.14
• B)1.29
• C)1.65
• D)1.94

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Definitions:

Activity-based Costing

A pricing strategy that allocates expenses to goods or services according to the tasks they necessitate, striving for a more accurate distribution of costs.

Relevant Cost

A cost that should be considered when making decisions.

Avoidable Costs

Costs that can be eliminated if a particular decision is made, such as discontinuing a product line.

Irrelevant Costs

Costs that will not be affected by a decision and therefore should not be considered when making that decision.