The Current Ratio Is Calculated by Dividing Current Assets -

question 9

True/False

The current ratio is calculated by dividing current assets - inventory by current liabilities.

---

Definitions:

Manufacturing Overhead

All indirect costs associated with manufacturing, such as utilities, maintenance, and factory management salaries, not directly tied to producing a specific product.

Opportunity Costs

The cost of foregoing the next best alternative when making a decision or choosing an option.

Activity Increases

A term indicating a rise in the level of business or production activities.

Contribution Margin

The amount by which sales revenue exceeds variable costs, contributing towards covering fixed costs and profit.