The Concept That Says Managers Should Be Evaluated on the Basis

question 33

Multiple Choice

The concept that says managers should be evaluated on the basis of revenues and/or expenses they can control is known as the:

• A) Management by exception concept.
• B) Controllability concept.
• C) Responsibility concept.
• D) None of these.

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Definitions:

Marginal Cost

is the cost incurred by producing one additional unit of a product or service.

Profits

The financial gain made in a transaction or operation, calculated as the difference between revenue and expenses.

Firm

A business organization, such as a corporation or partnership, that sells goods or services in exchange for revenue.

Profit-Maximizing Firm's Output

The output level at which a firm achieves the maximum possible profit, typically where marginal cost equals marginal revenue.