The Rule for Making Optimal Decisions Is That an Activity

question 43

Multiple Choice

The rule for making optimal decisions is that an activity should be increased until:

• A) average costs are minimized.
• B) total costs are minimized.
• C) total benefits are maximized.
• D) marginal benefits equal marginal costs.

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Definitions:

Administrative Expenses

Administrative expenses are the costs associated with the general administration of a business, such as salaries of office staff, utilities, and rent.

Schedule of Expected Cash Collections

A detailed projection of the amounts and timing of cash inflows from receivables anticipated to be collected.

Merchandise Purchases Budget

A financial plan that outlines the expected purchases of merchandise inventory over a certain period, considering anticipated sales and desired inventory levels.

Accounts Receivable

Outstanding payments from clients to a business for goods delivered or services rendered, awaiting settlement.