Which Statement Is Correct

question 46

Multiple Choice

Which statement is correct?

• A)Equity holders are concerned more about the debt accounts in the financial statements.
• B)Equity holders are concerned about the debt and equity accounts in the financial statements.
• C)Debt holders are concerned about the debt and equity accounts in the financial statements.
• D)Debt holders are concerned more about the equity accounts in the financial statements.

---

Definitions:

Constrained Resource

A factor within a production or operation process that limits the overall output, such as limited machinery, labor, or materials.

Direct Labour-Hours

The total hours worked by employees directly involved in the manufacturing process, used as a basis for assigning labor costs to products.

Contribution Margin

The difference between sales revenue and variable costs, representing the portion of sales that contributes to covering fixed costs.

Production Constraint

A limit to the amount or volume of production, often caused by the availability of resources, technology, or market demand.