Which of the Following Is NOT a Limitation to Using

question 33

Multiple Choice

Which of the following is NOT a limitation to using departmental operating income?

• A)It is difficult to determine each department's fair share of semidirect and indirect expenses.
• B)If one department is eliminated, many of the expenses allocated to it would continue.
• C)Managers rely more on contribution per department than on income from operations.
• D)It highlights the individual department's financial information.

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Definitions:

Dividend Payout

Dividend Payout refers to the portion of a company's earnings distributed to shareholders as dividends, representing a return on investment.

Dividend Yield

A financial measurement that illustrates the annual amount a company dispenses in dividends compared to its current stock price.

P/E Ratio

The ratio of a company's share price to its earnings per share, indicating the value the market places on its earnings.

Earnings Retention Ratio

The proportion of net earnings not paid out as dividends but retained by the company to be reinvested in its core business, or to pay debt.