The Maximin Approach to Decision Making Refers to

question 34

Multiple Choice

The maximin approach to decision making refers to

• A) minimizing the maximum return.
• B) maximizing the minimum return.
• C) maximizing the maximum return.
• D) minimizing the minimum return.

---

Definitions:

Idle Capacity

Unused or underutilized resources within a business, often indicating inefficiency, where machinery, space, or labor is not being employed to full capacity.

Variable Overhead Cost

Costs that vary with the level of production output, such as supplies and utilities for manufacture.

Variable Costing

An accounting method that includes only variable production costs (direct materials, direct labor, and variable manufacturing overhead) in the cost of goods sold, excluding fixed overhead costs.

Absorption Costing

A cost accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed overhead - as part of the cost of a finished product.