Business Decisions Should Not Simply Be Focused on the Degree

question 51

Multiple Choice

Business decisions should not simply be focused on the degree of economic profit to be earned.There are other factors,including societal consequences,which need to be considered when making decisions about the direction of a business.To which proposition of the Davis Model of Corporate Social Responsibility does this strictly pertain?

• A) Business shall operate as a two-way open system, with open receipt of inputs from society and open disclosure of its operations to the public.
• B) The social costs related to each activity, product, or service shall be passed on to the consumer.
• C) The social costs and benefits of an activity, product, or service shall be thoroughly calculated and considered in deciding whether to proceed with it.
• D) Business institutions have the responsibility to become involved in certain social problems that are outside their normal areas of operation.

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Definitions:

Predetermined Overhead Rate

A rate calculated before a period begins, used to allocate manufacturing overhead costs to products.

Machine-Hours

A measure of production time, referring to the total number of hours machines are operated during a specific period.

Manufacturing Overhead

All indirect costs associated with the production process, such as utilities, maintenance, and salaries for production managers.

Overapplied Overhead

An instance where the designated cost for manufacturing overhead surpasses the real overhead costs experienced.