The Controller of Excello Manufacturing,Inc

question 12

Multiple Choice

The controller of Excello Manufacturing,Inc.,wants to use ratio analysis to identify the possible existence of idle equipment or the possibility that equipment has been disposed of without having been written off.Which of the following ratios would best accomplish this objective?

• A) Depreciation expense/book value of manufacturing equipment.
• B) Accumulated depreciation/book value of manufacturing equipment.
• C) Repairs and maintenance cost/direct labor costs.
• D) Gross manufacturing equipment cost/units produced.

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Definitions:

Critical-Incident Technique

A method used to collect direct observations of human behavior that significantly contribute to an aspect of performance.

Recency Bias

The tendency to weigh recent events more heavily than earlier events when making decisions or evaluations.

Evaluations

The systematic assessment of the performance, value, or quality of an individual, organization, or program.

Traits Rating Scale

A method used in performance management where employees are evaluated based on certain defined characteristics or traits.