Which of the Following Is a Decision Rule for Handling

question 8

Multiple Choice

Which of the following is a decision rule for handling questionable costs?

• A)If expected sales are between the two break-even points, the questionable costs behavior needs to be dropped.
• B)If expected sales don't exceed the higher break-even point, the product should be profitable.
• C)The product should not be profitable if expected sales do not exceed the lower break-even point.
• D)Decide which questionable costs to ignore.

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Definitions:

Incentives

Financial or non-financial rewards offered to encourage specific behaviors or outcomes, often used to motivate individuals or businesses to perform optimally.

State Tax

A financial charge or levy imposed by a state government on income, property, or sales.

Marginal Cost

The added financial burden from producing one more unit of a product or service.

Marginal Revenue

The surplus revenue earned from the sale of an extra unit of a product or service.