If Moon Corporation Has an Increase in Sales,which of the Following

question 42

Multiple Choice

If Moon Corporation has an increase in sales,which of the following would result in no change in its EBIT margin?

• A)A proportional increase in its net income
• B)A proportional decrease in its EBIT
• C)A proportional increase in its EBIT
• D)An increase in its operating expenses

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Definitions:

Activity-Based Costing

A costing method that assigns overhead and indirect costs to related products and services based on the activities that generate those costs.

Direct Labor-Hours

The total number of labor hours worked by employees who are directly involved in the manufacturing process.

General Factory

An umbrella term referring to the physical location where manufacturing operations occur, encompassing all areas of production.

Activity Rate

A rate used in activity-based costing to allocate overhead costs to products or services, based on their consumption of activities.