Which of the Following Statements About Rational Choices Is the Most

question 32

Multiple Choice

Which of the following statements about rational choices is the most accurate?

• A) They can only be made by comparing opportunity cost with the marginal cost.
• B) They are made based on expectations of the additional benefits and additional costs involved.
• C) They are based on a comparison of total benefits and total costs.
• D) They measure benefits based on the past.

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Definitions:

Production Budget

An estimate of the total cost of production, including direct material, labor, and overhead expenses, for a specific period.

Management's Plans

The strategic and operational plans developed by a company's management to achieve its goals and objectives.

Direct Labor Hours

The sum of working hours of employees directly participating in the production of goods or provision of services.

Production Budget

An estimate of the total number of units that must be produced in a given period to meet both sales and inventory needs.