According to the Marginal Decision Rule, If Marginal Benefit

question 76

Multiple Choice

According to the marginal decision rule, if marginal benefit:

• A) exceeds marginal cost, an activity should be reduced.
• B) is less than marginal cost, an activity should be reduced.
• C) is equal to marginal cost, an activity should be reduced.
• D) exceeds marginal cost, net benefit is maximized.

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Definitions:

Inventory Shrinkage

The loss of products between purchase from the supplier and sale to the customer, often due to theft, damage, or errors in inventory management.

Theft

An act of stealing; unlawfully taking another's property without their consent.

Damage

The physical harm or impairment to property or goods, potentially leading to financial loss or liability.

Periodic Inventory System

A method of inventory valuation in which physical inventory counts are conducted at specific intervals to determine cost of goods sold and ending inventory levels.