What Is the Maximin Principle

question 102

Multiple Choice

What is the maximin principle?

• A)that government should minimize benefits that the maximum income earners receive from society,
• Allowing others to become better-off
• B)that government should maximize benefits that the minimum income earners receive from society,
• Making them as well-off as possible (True Answer
• )Correct
• C)that the least well-off people in society should be made as well-off as anyone else in society
• D)that the most well-off people in society should have a maximum level of wealth

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Definitions:

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual products based on a certain activity base, such as labor hours or machine hours.

Activity-based Costing

A costing methodology that assigns overhead and indirect costs to specific activities, thereby providing more accurate product costing.

Traditional Cost System

A cost accounting system that assigns costs to products based on direct labor hours, direct materials, and manufacturing overhead, without differentiating between variable and fixed costs.

High-volume Products

Items that are produced in large quantities, typically benefiting from economies of scale in manufacturing processes.