Profit Maximization

question 9

Multiple Choice

Profit maximization

• A) makes a firm become as large as possible.
• B) makes a firm remain small in the long run.
• C) increases the likelihood that a firm will survive.
• D) leads a firm to become the target of a takeover.

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Definitions:

Net Income

A company's overall profit after subtracting expenses and taxes from its revenue.

Manufacturing Margin

The difference between the sales revenue generated from manufactured goods and the cost of goods sold, reflecting the profitability of the manufacturing operations.

Variable Costing

A costing method that includes only variable manufacturing costs - direct materials, direct labor, and variable manufacturing overhead - in product costs.

Variable Cost

Variable costs are expenses that vary directly with the level of production or sales volume.