Cost Efficiency Refers to the

question 6

Multiple Choice

Cost efficiency refers to the

• A)Amount of output associated with an additional dollar spent on input.
• B)Effectiveness of labor in reducing production costs.
• C)MPP of labor divided by the product price.
• D)Ability to produce at a level of output where the wage rate is equal to or less than the MRP.

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Definitions:

Acid-test Ratio

A financial metric that measures a company's ability to pay off its short-term liabilities with its quick assets, excluding inventory.

Return On Total Assets

A financial ratio that measures a company's efficiency in using its assets to generate profit, calculated by dividing net income by total assets.