Often the Most Difficult Part of Computing Accurate Unit Costs

question 41

Multiple Choice

Often the most difficult part of computing accurate unit costs is determining the proper amount of _________ to assign to each product, service, or job.

• A) direct materials
• B) direct labor
• C) overhead
• D) direct materials and direct labor

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Definitions:

Gross Margin Ratio

A financial ratio that measures a company's financial health, calculated by subtracting the cost of goods sold from net sales and dividing by net sales.

Sales Revenue

The total amount of money received by a company from sales of goods or services before any expenses are subtracted.

Cost of Goods Sold

Expenses specifically related to producing the merchandise a company markets.

Acid-test Ratio

A financial metric that measures a company's ability to pay off its current liabilities with its quick or liquid assets.