In Calculating the Profit Linkage,PQ Represents the Productivity-Neutral Quantity of Input.How

question 82

Multiple Choice

In calculating the profit linkage,PQ represents the productivity-neutral quantity of input.How is PQ calculated?

• A)current period output/base period output
• B)current period output/base period productivity ratio
• C)prior period output/base period productivity ratio
• D)current period output/standard quantity output

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Definitions:

Residual Income

Residual income is the profit remaining after deducting all required costs of capital from operating income.

Margin

Typically refers to the difference between the selling price of a product and its cost, used to measure profitability.

Turnover

The rate at which inventory or assets are sold and replaced or the rate at which employees are replaced in a business.

Residual Income

The amount of income that an investment or project generates above the minimum rate of return.