Efficiency Is Defined as the Ratio Of

question 101

Multiple Choice

Efficiency is defined as the ratio of:

• A)actual output to effective capacity.
• B)actual output to design capacity.
• C)design capacity to effective capacity.
• D)effective capacity to actual output.
• E)design capacity to actual output.

Calculate return on total assets and understand its significance.

Understand the consolidation process for financial statements.

Recognize and account for unrealized gains and losses.

Recognize the significance of ownership percentages in determining the method of accounting for investments.

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Definitions:

Indirect Costs

Expenses that are not directly tied to the production of goods or services, such as overhead, administration, and salaries.

Salespersons' Salaries

Fixed or variable payments made to sales staff as compensation for their services, typically involving a base salary and possibly commissions.

Direct Costs

Costs that can be directly traced to a specific product, project, or activity without any ambiguity.

Indirect Costs

Costs that are not directly attributable to the production of goods or services and cannot be directly applied to a specific product, service, or project.