In a Manufacturing Environment, the Short-Term Profit-Maximizing Decision Would Be

question 23

Multiple Choice

In a manufacturing environment, the short-term profit-maximizing decision would be to:

• A) Maximize gross profit.
• B) Minimize total variable cost of all units produced.
• C) Minimize fixed overhead (i.e., fixed manufacturing support) cost per unit by producing to capacity.
• D) Maximize total contribution margin for units produced/sold.
• E) Maximize total sales revenue for units produced/sold.

---

Definitions:

Standard Deviation

A statistical measure of the dispersion or variability of a set of data points, indicating the degree to which individual data points differ from the mean.

Beta

An indicator of a stock's fluctuation in comparison to the general market, denoting its relative risk to the average market movement.

Diversification

A risk management strategy that involves spreading investments across various financial instruments, industries, or other categories to reduce exposure to any single asset or risk.

Risk-Averse Investors

Investors who prioritize minimizing risk over maximizing returns, often choosing safer, lower-yield investments.