Return on Investment (ROI)is Calculated Using the Formula _____

question 40

Multiple Choice

Return on investment (ROI) is calculated using the formula _____.

• A) ROI = (total benefits - total costs)/ total costs
• B) ROI = (total costs - total benefits)/ total costs
• C) ROI = (total benefits - total costs)/ total benefits
• D) ROI = (total costs - total benefits)/ total benefits

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Definitions:

Predetermined Overhead Rate

A rate calculated before an accounting period begins, used to allocate manufacturing overhead to individual jobs or units based on a consistent measure, such as direct labor hours.

Direct Labor-Hours

The total hours worked by employees directly involved in the production process, often used as a basis for allocating costs to products.

Machine-Hours

A measure of production time, reflecting the total hours that machinery is operational during a specific period.

Multiple Overhead Rate

The use of more than one overhead rate to allocate a company's indirect costs more accurately than a single overhead rate.