The Difference Between a Supply and an Indirect Material Is

question 118

Multiple Choice

The difference between a supply and an indirect material is that

• A)supplies are not necessary for production.
• B)indirect materials are not physically part of the product.
• C)supplies are not necessary for production and are not physically part of the product.
• D)supplies are necessary for production and are not physically part of the product.

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Definitions:

Return On Investment

A measure of the profitability and efficiency of an investment, calculated as net profit divided by the cost of the investment.

Invested Assets

Assets that have been purchased or acquired for the purpose of generating income or profit, not for immediate resale.

Minimum Return

The lowest acceptable rate of return on an investment that a manager or investor is willing to accept.

Residual Income

Residual income is the amount of net income generated in excess of the minimum rate of return. It's often used to assess the performance of business units.