A Firm's Business Risk Is Measured by the Variability in Which

question 63

Multiple Choice

A firm's business risk is measured by the variability in which one of the following over time:

• A) net sales
• B) total assets
• C) operating income (EBIT)
• D) net income

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Definitions:

Support Department

A division within an organization that provides essential services to other departments but does not directly contribute to profit, such as IT or HR.

Cost Allocation

The process of distributing or assigning indirect costs to different departments, products, or projects.

Reciprocal Method

An approach in cost accounting used to allocate service department costs to production departments, considering the mutual services exchanged between service departments.

Reciprocal Services

Refers to the mutual exchange of services between departments within an organization to support each other's operations.