Which Performance Metric Is Incorrectly Matched with Its Description

question 32

Multiple Choice

Which performance metric is incorrectly matched with its description?

• A) Program return on investment = additional profit generated/program investment
• B) Maintenance ratio = # customers retained/# customers lost
• C) Customer loss rate = # of customers lost/# customers added
• D) Conversion efficiency = # of new customers generated/program investment

---

Definitions:

Standard Costs

Predetermined costs assigned to goods and services, used as benchmarks to measure performance by comparing them with actual costs.

Factory Overhead

The sum of all indirect costs of manufacturing, including expenses related to the operation of factories such as utilities and rent, articulated with different phrasing.

Predetermined Rate

A rate established in advance to apply overhead costs to products or job orders, usually based on estimated costs and activity levels.

Standard Cost Tables

Reference charts that list the predetermined costs for various products or services, facilitating cost control and budgeting.