Ratios Exhibit the Relationship Between Figures from Year to Year

question 32

True/False

Ratios exhibit the relationship between figures from year to year and the reason for the changes year to year.

---

Definitions:

Variable Costing

An accounting technique that considers only variable costs - those that vary with production levels - when calculating the cost of producing goods.

Net Operating Income

The earnings a business retains following the subtraction of operational costs, not including interest and taxes.

Net Operating Income

The financial gain a company receives from its essential business operations, prior to the removal of interest and tax costs.

Variable Costing

Variable costing is an accounting method that only includes variable production costs (direct materials, direct labor, and variable manufacturing overhead) in the cost of a product.