A High Debt Ratio Indicates an Excessive Amount of Debt

question 13

True/False

A high debt ratio indicates an excessive amount of debt and should be reduced over time to avoid any debt repayment problems.

---

Definitions:

Direct Labor Hours

The total hours worked by employees directly involved in the manufacturing process.

Payroll

The total amount of wages, salaries, and other earnings paid by a business to its employees.

Labor Efficiency

The measure of the amount of work accomplished with a specific amount of labor input.

Labor Quantity Variance

The difference between the actual labor hours worked and the standard hours expected, multiplied by the standard labor rate.