A Manager Who Emphasizes Cost Containment, Even at the Expense

question 79

Multiple Choice

A manager who emphasizes cost containment, even at the expense of missing production targets, is more interested in ___ than in ___.

• A) performance efficiency; performance effectiveness
• B) performance effectiveness; performance efficiency
• C) productivity; performance efficiency
• D) productivity; performance effectiveness
• E) productivity; profitability

Calculate and interpret fixed and variable overhead variances, including budget, volume, and efficiency variances.

Understand the difference between fixed and variable overhead costs and their impacts on product costing.

Analyze the components of the predetermined overhead rate (fixed and variable components).

Calculate and understand the concept of underapplied or overapplied overhead.

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Definitions:

Consumer Goods

Products and commodities bought and used by individuals and households for personal consumption.

Capital Goods

Long-lasting goods that are used in the production of other goods and services but are not themselves part of the end product.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision, representing the benefits one misses out on when choosing one option over another.

Socialistic Economies

Economic systems where the production and distribution of goods and services are controlled by the state, aiming for equal wealth distribution and reduction of economic inequalities.