Decision Making Where Managers Recognize and Understand That the Systematic

question 59

Multiple Choice

Decision making where managers recognize and understand that the systematic use of the best available data will improve their management practices and decision making is called ________.

• A)rational management
• B)satisficing decision making
• C)evidence-based management
• D)innovative management

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Definitions:

Variable Costing

An accounting method that records variable costs (costs that change with production levels) as product costs, while fixed costs are recorded as expenses in the period they are incurred.

Absorption Costing

A method in accounting that involves integrating all costs related to manufacturing, namely direct materials, direct labor, and all variable and fixed overhead expenses, into the pricing of a product.

Fixed Overhead

Costs that remain constant regardless of the level of production or sales activities, such as rent, salaries, and insurance.

Period Cost

Any cost that cannot be capitalized into prepaid expenses, inventory, or fixed assets. A non-manufacturing cost that is expensed in the period in which it is incurred.