Refer to Table 4

question 37

Multiple Choice

Refer to Table 4.1.Mike's preferences are consistent with the Ranking Principle because:

• A) the two goods are perfect complements.
• B) there are no empty cells.
• C) in each column, the choices at the top are ranked lower than the choices at the bottom.
• D) in each column, the choices at the top are ranked higher than the choices at the bottom.

---

Definitions:

Variable Selling

denotes the costs that vary directly with the level of sales, such as commissions or shipping charges.

Administrative Costs

Expenses related to the general administration of a business, such as salaries of executive staff, office supplies, and utilities.

Target Costing

A pricing approach where a company determines the potential selling price of a product and then subtracts desired profit to arrive at a target cost, subsequently focusing on reducing manufacturing costs to meet this target.

Return on Investment

A financial metric used to evaluate the efficiency or profitability of an investment, calculated by dividing the profit gained from an investment by the cost of the investment.