Which of the Following Is a Common Mistake That Managers

question 15

Multiple Choice

Which of the following is a common mistake that managers make?

• A)Using marginal analysis to make output decisions.
• B)Maximizing the value of the firm instead of maximizing the firm's profits.
• C)Reducing price to increase the firm's share of total market sales.
• D)Treating implicit opportunity costs as part of the total costs of using resources.
• E)all of the above.

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Definitions:

Variable Selling Expense

Costs associated with selling a product that vary with the volume of sales, such as commissions or shipping costs.

Fixed Manufacturing

Costs associated with manufacturing that do not vary with the level of production output, such as rent for factory premises, salaries of permanent staff, and depreciation of machinery.

Special Order

An order for a product or service that is outside the company's standard offerings, typically requiring unique specifications or quantities.

Split-off Point

The stage in the production process where multiple products become separately identifiable, often relevant in costing and decision-making processes.