A Rational Decision Maker Takes an Action Only If the

question 90

Multiple Choice

A rational decision maker takes an action only if the

• A)marginal benefit is less than the marginal cost.
• B)marginal benefit is greater than the marginal cost.
• C)average benefit is greater than the average cost.
• D)marginal benefit is greater than both the average cost and the marginal cost.

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Definitions:

Job Cost

A method used in accounting to track the costs associated with a specific job or order, capturing materials, labor, and overhead expenses.

Predetermined Overhead Rate

A rate calculated before the accounting period begins, used to apply manufacturing overhead to products or job orders.

Direct Labor-hours

The total hours worked by employees who are directly involved in the manufacturing or production process of goods.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to products, calculated based on estimated costs and activity levels.