Which of the Following Is Not Used in Determining a Company's

question 38

Multiple Choice

Which of the following is not used in determining a company's profitability on assets?

• A) return on assets
• B) debt ratio
• C) operating profit margin
• D) total asset turnover

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Definitions:

Variable Costing

This costing method includes only variable production costs (direct materials, direct labor, and variable manufacturing overhead) in product costs.

Variable Production Costs

Costs that vary directly with the level of production output, such as raw materials andDirect labor.

Product Costs

Costs that are incurred to create a product that includes direct materials, direct labor, and manufacturing overhead.

Segment Margin

The amount of profit or loss generated by a specific division or segment of a company, excluding common costs shared across segments.