The Profit-Maximizing and the Least-Cost Combination of Inputs Are

question 34

Multiple Choice

The profit-maximizing and the least-cost combination of inputs are

• A) the result of unrelated decisions.
• B) always identical.
• C) such that minimizing costs always results in profit maximization.
• D) such that maximizing profits always entails the least-cost combination of inputs.

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Definitions:

Unused Capacity

The difference between a company's actual production and its maximum possible production without additional capital investment.

Job-Order Costing

An accounting method that tracks the costs associated with creating a specific product or delivering a specific service, making it possible to calculate the profit on individual jobs.

Predetermined Overhead Rate

A rate calculated before a period begins, used to allocate overhead costs to products or services based on a selected activity base.

Automated Shaper

A machine tool that operates under programmed control to shape materials.