The DuPont System Merges the Income Statement and Balance Sheet

question 137

Multiple Choice

The DuPont system merges the income statement and balance sheet into two summary measures of profitability

• A) net profit margin and return on total assets.
• B) net profit margin and return on equity.
• C) return on total assets and return on equity.
• D) net profit margin and price/earning ratio.

---

Definitions:

Activity-Based Costing System

A costing methodology that assigns costs to products or services based on the activities they require and the resources consumed by these activities.

Direct Labor Cost

The cost associated with workers who are directly involved in the production of goods or services.

Activity-Based Costing

A costing methodology that assigns overhead and indirect costs to specific activities, providing more accurate product costing.

Activity-Based Costing System

A refined method of allocating costs to products or services based on activities that drive costs, enhancing accuracy in costing.