If Microsoft Is Earning a Rate of Return Greater Than

question 226

Multiple Choice

If Microsoft is earning a rate of return greater than the return necessary for the business to continue operations in the long run, then

• A) total costs exceed total revenue.
• B) total costs exceed a normal rate of return.
• C) the normal rate of return is zero.
• D) the firm is earning an economic profit.

Recognize the importance of ethics in accounting and the role of generally accepted accounting principles.

Understand the basic forecasting methods and their appropriate contexts of application.

Identify and calculate different forecasting accuracy measures such as root mean square error, mean absolute deviation, and mean absolute percentage error.

Distinguish between different types of time series patterns such as trend, seasonal, and cyclical effects.

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Definitions:

Direct Material Cost

The cost of raw materials and components that are directly used in the production of a product.

Labor Quantity Variance

The difference between the actual hours worked and the standard hours allowed for the work performed, multiplied by the standard hourly wage rate.

Produced

The completed output of goods or services as a result of manufacturing or production processes.

Materials Price Variance

The difference between the actual cost of materials used in production and the expected (or standard) cost of those materials.