The Manager of a Restaurant Noticed That the Number of Customers

question 27

Multiple Choice

The manager of a restaurant noticed that the number of customers in the evening was decreasing. She promptly ordered the chef to rewrite the evening menu. Later, customer feedback indicated that the problem was not the menu but poor service from the waitstaff. The manager's decision to have the menu revised suggests that she failed to:

• A) identify and diagnose the problem.
• B) evaluate alternatives.
• C) generate alternative solutions.
• D) evaluate the decision.
• E) make a choice.

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Definitions:

Variable Factory Overhead Controllable Variance

The difference between the actual variable overhead costs incurred and the expected costs based on the standards set for the production volume.

Total Factory Overhead Cost Variance

The difference between the actual overhead costs incurred and the standard overhead costs assigned to production over a given period.

Factory Overhead Cost Budget

Budget that estimates the cost for each item of factory overhead needed to support budgeted production.

Total Variable Cost

The sum of all costs that vary directly with the level of production or sales volume.