A __________ Diagnostic System Is One That Measures What It

question 101

Multiple Choice

A __________ diagnostic system is one that measures what it is supposed to measure, while a ____ diagnostic system results in the same result each time.

• A) reliable; valid
• B) predictive; sensitive
• C) categorical; dimensional
• D) sensitive; valid
• E) valid; reliable

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Definitions:

Direct Materials

Raw materials that are directly traceable to the production of a specific product and include in its cost.

Predetermined Overhead Rate

A rate calculated before a period begins, used to allocate manufacturing overhead costs to products based on a specific activity base.

Budgeted Manufacturing Overhead

The estimated total indirect costs related to the production process, planned for a specific period.

Cost Driver

A factor that causes or relates to a change in the cost of an activity or a product, such as machine-hours, labor-hours, or material usage.