A Measure of the Manager's Ability to Control Expenses and Increase

question 46

Multiple Choice

A measure of the manager's ability to control expenses and increase revenues to improve profitability is:

• A) Residual income (RI) divided by level of invested capital.
• B) Return on equity (ROE).
• C) Return on investment (ROI).
• D) Return on sales (ROS).
• E) Asset turnover (AT).

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Definitions:

November

The eleventh month of the year in the Gregorian calendar, often associated with fall in the northern hemisphere and spring in the southern hemisphere.

Raw Materials

The basic, unprocessed inputs required for the production process in manufacturing goods.

Direct Labor-Hours

A measure of the amount of time spent by workers directly involved in the manufacturing process, used in calculating labor costs and efficiency.

Journal Entry

A record in the accounts of a business, documenting a financial transaction with both debit and credit parts.