Under the Justice Rule, Managers Should Determine Fair Rules and Procedures

question 57

True/False

Under the justice rule, managers should determine fair rules and procedures for distributing outcomes to stakeholders.

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Definitions:

Fixed Expenses

Costs that do not vary with the level of production or sales, such as rent, salaries, or utilities.

Profit

The financial gain achieved when the revenues generated from business activities exceed the expenses, costs, and taxes needed to sustain those activities.

Margin Of Safety

The extent to which sales can decline before a business reaches its breakeven point.

Variable Expenses

Costs that change in proportion to the level of production or sales activities.