The Optimal Amount to Spend on Actions That Decrease the Probability

question 107

Multiple Choice

The optimal amount to spend on actions that decrease the probability of bad outcomes is the amount that sets the_______ _ of reducing the probability of a bad outcome equal to the _______of the action(s) that reduce(s) the probability.

• A)marginal benefit; marginal cost
• B)expected marginal benefit; marginal cost
• C)marginal benefit; expected marginal cost
• D)expected marginal benefit; expected marginal cost

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Definitions:

Direct Materials

Raw materials that can be directly traced to the production of a product and are an integral part of the finished product.

Materials Ledger

A financial record in an inventory system that records the quantities and costs of materials on hand and used.

Subsidiary Ledger

A detailed ledger containing all of a particular account's transactions, feeding into and supporting a main accounting ledger.

Job Order Cost System

An accounting system that assigns costs to specific production batches or jobs and is used in situations where items are distinct and made to order.