A Common Measure of Profitability Is the

question 51

Multiple Choice

A common measure of profitability is the

• A)current ratio.
• B)free cash flow.
• C)return on common shareholders' equity ratio.
• D)debt to total assets ratio.

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Definitions:

Actual Direct Labor Hours

The real hours worked by employees directly involved in the production process.

Direct Labor Time Variance

The calculation difference between the expected time to produce an item and the actual time taken, impacting cost control and labor efficiency.

Unfavorable Cost Variance

A situation where actual costs exceed the expected or budgeted costs, indicating that a company is spending more than planned.

Revenue Volume Variance

The difference between the actual sales revenue received and the expected revenue, based on the budgeted sales volume.