When Managers Are Making Decisions Where the Outcomes of Alternatives

question 93

Multiple Choice

When managers are making decisions where the outcomes of alternatives are not known,they are working under conditions of:

• A)Risk
• B)Uncertainty
• C)Certainty
• D)Satisficing
• E)Bounded rationality

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Definitions:

Variable Cost

Expenses that change in proportion to the volume of goods or services produced by a business.

Activity

An event that causes the consumption of overhead resources in an organization.

Cost Driver

A factor that causes a change in the cost of an activity, such as machine-hours or labor hours, used in determining pricing and profitability.

Flexible Budgets

Budgets that adjust or flex with changes in the volume or level of activity.