Which of the Following Will Cause an Increase in Net

question 38

Multiple Choice

Which of the following will cause an increase in net operating income (NOPAT) ?

• A)Increase in the return on net operating assets
• B)Decrease in the return on net operating assets
• C)No change in the return on net operating assets
• D)There is not sufficient information

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Definitions:

Variable Overhead Efficiency Variance

The difference between the actual variable overhead incurred and the standard cost of variable overhead allocated, based on the efficiency of operations.

Supplies Cost

Supplies cost refers to the expense incurred in purchasing office or production supplies that are necessary for day-to-day operations.

Variable Manufacturing Overhead

Costs in the manufacturing process that fluctuate with production volume, such as utilities and raw materials, which do not remain constant as production levels change.

Labor Efficiency Variance

The difference between the actual hours worked and the standard hours expected for the actual production achieved.