A Good Measure That Can Be Used to Help Assess

question 15

Multiple Choice

A good measure that can be used to help assess whether a not-for-profit organization is spending too much on overhead, such as general and administrative expenses, is:

• A) Percentage of unrestricted net assets to operating expenses.
• B) Current ratio.
• C) Total revenues divided by total expenses.
• D) Percentage of program expenses to total expenses.

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Definitions:

Deadweight Loss

Deadweight loss represents the efficiency lost to an economy because of market inefficiencies or interventions, where resources are not allocated optimally.

Consumer Surplus

The misalignment between the price consumers are willing to allocate for a good or service and the price they actually allocate.

Producer Surplus

The difference between what producers are willing to sell a good for and the actual market price they receive, representing the profit producers make.

Tax

A compulsory charge by the government on individuals or entities' income, property, or goods, used to fund public services and government obligations.