It Would Be Appropriate to Make Operations Accountable for Profitability

question 130

True/False

It would be appropriate to make operations accountable for profitability in an organization that stresses sales and market share over quality and productivity.

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Definitions:

Implicit Costs

Costs that represent the opportunity costs of using resources that the firm already owns, unlike explicit costs which involve direct monetary outlay.

Economic Loss

A decrease in financial wealth, goods, or resources, often as a result of business activities or economic policy decisions.

Accounting Profit

The net income a company reports on its financial statements, calculated as total revenues minus explicit costs.

Marginal Product

The additional output that is produced by using one more unit of a specific input, holding the levels of all other inputs constant.