If Net Profit Measures the Profitability of an Entire Firm,then

question 11

Multiple Choice

If net profit measures the profitability of an entire firm,then what measures the profitability of merchandising activities?

• A) Accounts receivable
• B) Asset turnover
• C) Gross margin
• D) Owner's equity
• E) Shrinkage

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Definitions:

Machine Breakdowns

Instances when machinery or equipment fails to operate, causing interruptions in production or operations.

Cost Variance

The differences between actual and standard costs.

Standard Cost

A detailed estimate of what a product should cost.

Actual Cost

The actual amount spent on goods, services, or other expenses, as opposed to budgeted or standard costs, including all direct and indirect costs.