Exhibit 14.8 The Following Questions Use the Information Below

question 22

Multiple Choice

Exhibit 14.8
The following questions use the information below.
A company needs to buy a new insurance policy. They have three policies to choose from, A, B and C. The policies differ with respect to price, coverage and ease of billing. The company has developed the following AHP tables for price and summary. The other tables are not shown due to space limitations.
-Which decision rule optimistically assumes that nature will always be "on our side" regardless of what decision we make?

• A) maximax decision rule.
• B) maximin decision rule.
• C) minimax regret decision rule.
• D) minimin decision rule.

---

Definitions:

Overhead Resources

The ongoing operational costs required to run a business that are not directly tied to a specific product or service, such as rent, utilities, and general office supplies.

Activity Pool

A concept in cost accounting used to gather all costs associated with a certain activity, facilitating more accurate cost allocation.

Activity-based Costing Method

A costing method that assigns costs to products or services based on the activities they require, aiming for more accurate allocation of overheads.

Cost Object(s)

Any item, activity, or project for which separate measurement of costs is desired, facilitating targeted expense management and financial efficiency.