In Calculating the Profit Linkage, PQ Represents the Productivity-Neutral Quantity

question 52

Multiple Choice

In calculating the profit linkage, PQ represents the productivity-neutral quantity of input. How is PQ calculated?

• A)PQ = Current period output / Base period output
• B)PQ = Current period output / Base period productivity ratio
• C)PQ = Prior period output / Base period productivity ratio
• D)PQ = Current period output / Standard quantity output

---

Definitions:

Merchandise

Goods or products that are bought and sold in commerce, typically in a retail environment.

Break-Even Level

The point at which total costs and total revenue are equal, resulting in no net loss or gain.

Monthly Interest Rate

The interest rate quoted or applied on a monthly basis, often used in loans or savings calculations.

Credit Policy

The guidelines a company follows to determine the creditworthiness of its customers and the terms of credit to offer.