If the Average Time to Serve a Customer Is 3

question 43

Multiple Choice

If the average time to serve a customer is 3 minutes,then the service rate,µ,is

• A)3 per hour.
• B)12 per hour.
• C)16 per hour.
• D)20 per hour.

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Definitions:

Variable Overhead

Costs that fluctuate with changes in production level or activity, such as utilities or materials, within the manufacturing overhead category.

Rate Variance

It is the difference between the actual rate paid for an item or service and the expected (standard or budgeted) rate, often used in budgeting and cost management.

Predetermined Overhead Rate

A rate calculated before a period begins, used to assign overhead costs to products or job orders based on a certain activity, such as machine hours or labor hours.

Variable Component

The portion of cost or expense that varies directly with changes in output or activity level.