________________________________ Measures How Efficiently an Investment Center Generates Sales from Its

question 16

Short Answer

________________________________ measures how efficiently an investment center generates sales from its invested assets.

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Definitions:

Fixed Costs

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance premiums.

Incremental Basis

A method of calculating changes in costs or benefits that result from small variations in the quantity of output or input.

Differential Basis

A method of calculating or analyzing the difference in costs or revenues between two alternative actions.

Sunk Cost

A cost that cannot be changed by any present or future decision.