Management's Goal of Rational Decision Making Is to Choose Optimal

question 116

True/False

Management's goal of rational decision making is to choose optimal solutions that provide maximum benefit to their organizations.

---

Definitions:

Contribution Margin

The contribution margin is the difference between sales revenue and variable costs, showing how much revenue contributes to fixed costs and profit.

Variable Costs

Expenditures that fluctuate based on the production levels or the number of sales.

Break-Even Point

The point at which total costs and total revenue are equal, meaning there is no net loss or gain.

Fixed Costs

Costs that do not vary with the volume of production or sales, such as rent, salaries, and insurance.