Which of the Following Expressions Is Termed the Profit Margin

question 53

Multiple Choice

Which of the following expressions is termed the profit margin factor as used in the DuPont formula for determining the return on investment (ROI) ?

• A)Sales ÷ Operating Income
• B)Operating Income ÷ Sales
• C)Invested Assets ÷ Sales
• D)Sales ÷ Invested Assets

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Definitions:

Actual Labor-Hours

Actual labor-hours represent the real number of labor hours worked by employees, as opposed to planned or estimated hours, often used in productivity and costing analyses.

Direct Material Standards

The anticipated cost and quantity of materials required for the production of goods or services.

Actual Cost

Actual cost refers to the exact amount of expenses incurred for producing a product or performing a service, contrasted with estimated or budgeted costs.

Standard Cost System

An accounting system that uses predetermined costs for product costing and decision making, facilitating budgeting and variance analysis.