What Does It Mean If a Person Makes a "Decision

question 91

Multiple Choice

What does it mean if a person makes a "decision at the margin"?

• A) The person compares additional benefits and additional costs when deciding what to do.
• B) The person weighs the good against the bad and then decides what to do.
• C) The person is more likely to say yes than to say no.
• D) The person compares marginal benefits and total costs and then decides what to do.
• E) The person makes a decision based on a condition.

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Definitions:

Absorption Costing

A cost accounting method that includes all manufacturing costs—direct materials, direct labor, and both fixed and variable manufacturing overhead—in the cost of a product.

Nonmanufacturing Costs

Expenses not directly related to the production of goods, such as selling, general, and administrative expenses.

Job-Order Costing

An accounting method that tracks costs individually for each job, suitable for manufacturing operations that produce goods based on specific customer orders.

Unit Product Cost

The total cost associated with producing one unit of product, including direct materials, direct labor, and allocated overhead.