A Technique for Evaluating Financial Statements That Expresses the Relationship

question 3

Multiple Choice

A technique for evaluating financial statements that expresses the relationship among selected items of financial statement data is

• A) common size analysis.
• B) horizontal analysis.
• C) ratio analysis.
• D) vertical analysis.

---

Definitions:

Markup

Markup refers to the amount added to the cost price of goods to cover overhead and profit, calculated as a percentage of the cost.

Predetermined Overhead Rate

A rate calculated before a period begins, used to allocate overhead costs to products or cost objects based on a consistent activity measure.

Overhead Applied

The amount of overhead cost allocated to specific products or cost centers based on a predetermined rate.

Job A496

A specific project or order identifier, representing a unique job or task within a job costing system.