The Following Data Came from the Financial Statements of a Company

question 62

Multiple Choice

The following data came from the financial statements of a company: What is the company's times interest earned ratio?

• A) 130
• B) 129
• C) 122
• D) 139

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Definitions:

Standard Rate

A predetermined cost or charge established for a particular good or service.

Direct Materials Quantity Variance

The difference between the actual quantity of materials used in production and the expected (or standard) quantity, multiplied by the standard cost per unit.

Standard Quantity

The expected or budgeted quantity of materials, labor, or overhead needed for production, based on norms or standards.

Actual Quantity

The real amount of inputs, such as raw materials or labor hours, consumed in the production process, as opposed to planned or standard quantities.