Which of the Following Potential Performance Measures Should an Auditor

question 159

Multiple Choice

Which of the following potential performance measures should an auditor recommend excluding from a performance scorecard?

• A) Number of employees.
• B) Market share.
• C) Number of customer complaints.
• D) Training dollars per employee.

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Definitions:

Economic Profit

The balance difference between total revenues and complete costs, encompassing both overt and intangible costs.

Cartel

An agreement among competing firms to control prices or exclude entry of a new competitor in a market, often to maximize profits illegally or unethically.

Marginal Cost

The change in total production cost that comes from making or producing one additional unit of a good or service.

Fixed Cost

Costs that do not change with the level of output produced, such as rent and salaries.