A Measure of a Corporation's Profitability That Is Required to Be

question 47

Multiple Choice

A measure of a corporation's profitability that is required to be reported as part of the income statement is the:

• A)earnings per share
• B)cash flow per share
• C)times interest earned
• D)gross margin percentage

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Definitions:

Standards

Predetermined benchmarks or norms used for measuring performance, costs, and efficiency in production.

Variable Overhead Efficiency Variance

This measures the difference between the actual variable overhead costs incurred and the standard costs expected for the actual production level achieved, pertaining to efficiency in managing variable overheads.

Machine-Hours

The total operational hours recorded for all machines within a production process, serving as a basis for calculating machine-related costs and efficiencies.

Manufacturing Overhead

All indirect costs associated with the production process, such as utilities, maintenance, and salaries for management.