Annual-Plan Control Requires Making Sure the Company Isn't Overspending to Achieve

question 81

Multiple Choice

Annual-plan control requires making sure the company isn't overspending to achieve sales goals. The key ratio to watch is ________.

• A) stock turnover
• B) gross margin
• C) return on capital
• D) cash flow return on investment
• E) marketing expense-to-sales

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Definitions:

Profit Maximized

Profit maximized refers to a scenario where a firm achieves the highest possible profit from its operations, where marginal costs equal marginal revenue.

Marginal Profit

Marginal profit refers to the additional profit a company gains from selling one more unit of a good or service.

Marginal Revenue

The additional income gained by selling one more unit of a product or service.

Total Cost

The sum of all expenses incurred in the production of goods or services, including both fixed and variable costs.