______ Ratios Can Help an Organization to Detect If It

question 142

Multiple Choice

______ ratios can help an organization to detect if it has obsolete or excessive inventory on hand.

• A)Return
• B)Liquidity
• C)Debt management
• D)Activity
• E)Asset management

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Definitions:

Differential Cost

The difference in total cost that will result from selecting one alternative over another in decision-making.

Product Costs

Costs that are directly associated with the production of goods or services, including direct materials, direct labor, and manufacturing overhead.

Period Costs

Expenses that are not directly tied to the production of goods and are therefore expensed in the period they occur, such as selling and administrative expenses.

Variable Cost

Costs that vary directly with the level of production or service delivery.