Performance Measurements

question 14

Multiple Choice

Performance measurements:

• A)​Assist in pricing of products
• B)Help to eliminate non-value-creating activities​
• C)Help identify new customer requirements​
• D)Both B & C​

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Definitions:

Fixed Manufacturing Overhead

The total of all costs related to manufacturing that do not change with the level of production, such as salaries of managers and rent of the factory.

Divisional Segment Margin

The profit margin for a specific division or segment of a company, calculated by subtracting direct and allocated expenses from segment revenues.

Net Operating Income

A measure of a company's profitability from its regular business operations, excluding non-operating income and expenses.

Common Fixed Expense

A recurring cost that does not vary with the level of output or sales, such as rent or salaries.