Which of the Following Statements Are True Regarding Profit Maximizing

question 136

Multiple Choice

Which of the following statements are true regarding profit maximizing firms?

• A) They will attempt to maximize the difference between total revenues and total costs.
• B) They will use more of a resource as long as the MRC is greater than the MRP.
• C) They will only produce where MRP is positive and MRC is negative.
• D) none of the above.

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Definitions:

Activity Cost Pools

Groupings of individual costs related to a particular activity, used in activity-based costing to allocate costs more accurately.

Direct Labor-hours

The overall hours that workers, who are a part of the manufacturing operations, put in.

Activity-based Costing

A costing method that allocates overhead costs to products based on the activities required to produce those products.

Record-keeping Cost

Expenses associated with maintaining accurate and comprehensive records of a company’s financial transactions and operations.