Which of the Following Is a Ratio That Measures the Firm's

question 9

Multiple Choice

Which of the following is a ratio that measures the firm's internal performance with respect to key activities defined by management?

• A) A liquidity ratio
• B) An activity ratio
• C) Return on total assets
• D) A current ratio
• E) Profit margin on sales

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Definitions:

Prime Costs

The combined costs of direct materials and direct labor, which are directly attributable to the production of goods.

Conversion Costs

Expenses incurred when converting raw materials into finished products, typically including labor and overhead costs.

Factory Supervisor's Salary

The remuneration paid to individuals responsible for managing the operations and employees within a manufacturing plant.

Direct Cost

Expenses directly linked to the creation of particular products or services, including raw materials and labor.