Table A.3 Use the Following to Answer the Questions Below

question 90

Multiple Choice

Table A.3
Use the following to answer the questions below.
In choosing between three new jobs,Joe MBA considers the potential payoffs over the next three years.The following table contains the payoffs,given the speed of promotion in each of the organizations.The probability of fast promotion is 0.6,and the probability of slow promotion is 0.4.

-Use the information in Table A.3 and the expected-value rule.Which statement is TRUE?

• A)The expected value of the consultant job is more than $300,000.
• B)The expected value of the utility analyst job is more than $300,000.
• C)The expected value of the research assistant job is less than $250,000.
• D)The job with the highest expected value is the research assistant.

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Definitions:

Underapplied

A situation where the allocated manufacturing overhead costs are less than the actual overhead costs incurred.

Overapplied

A situation where the estimated cost allocated to a product or job exceeds the actual costs incurred.

Fixed Overhead Budget

A financial plan that estimates the fixed costs needed to produce goods or services over a specific period.

Volume Variance

The difference between the expected (budgeted) volume of activity and the actual volume, and its impact on the budgeted costs.