Error Costs Can Be Defined as

question 167

Multiple Choice

Error costs can be defined as

• A)the costs associated with the measurements required by the cost management system.
• B)unit costs assigned based on activities.
• C)the costs associated with making poor decisions based on bad cost information.
• D)none of these

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Definitions:

Error Management Theory

A theory suggesting that humans and other animals have evolved biases in judgement and decision-making processes to avoid more costly errors.

Omission Bias

The tendency to take whatever course of action does not require you to do anything (also called the default option).

Status Quo Bias

A cognitive bias favoring the existing state of affairs or the current baseline (the "status quo"), often leading to resistance against change.

Risk Aversion

A behavioral trait or tendency to avoid taking risks, preferring options that are perceived as safer or have more predictable outcomes.