The Quick Ratio Is an Example of Which Type of Ratio

question 7

Multiple Choice

The quick ratio is an example of which type of ratio?

• A) solvency ratio
• B) profitability ratio
• C) liquidity ratio
• D) activity ratio

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Definitions:

Predetermined Overhead Rate

The predetermined overhead rate is calculated before a period begins and is used to allocate overhead costs to products or job orders based on a consistent activity base.

Direct Labour-Hours

The cumulative hours that employees engaged in the production process have worked.

Cost of Goods Manufactured

Total production cost of goods completed during a specific period, including materials, labor, and overhead.

Overapplied Overhead

Occurs when the allocated manufacturing overhead cost is more than the actual overhead incurred during a period.