Human Resources Costs Should Be Allocated to Business Units Based

question 15

True/False

Human resources costs should be allocated to business units based on the number of employees in the units.

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Definitions:

Break-even Point

The break-even point is the sales level at which total revenues equal total costs, resulting in neither profit nor loss.

Degree of Operating Leverage

A financial ratio that measures the sensitivity of a company's operating income to its sales volume, showing the impact of fixed costs on earnings.

Net Operating Income

A measure of a company's profitability, calculated by subtracting operating expenses from gross profit, not including non-operating income and expenses, interest, and taxes.

Break-even Point

A situation where overall expenses and earnings balance out, leaving no profit or deficit.