Days' Sales in Receivables Measures the Return on Average Receivables

question 147

True/False

Days' sales in receivables measures the return on average receivables.

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Definitions:

Machine-Hours

The total hours that machinery is operating in the production process, often used as a basis for allocating costs to products.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to products, calculated before the production period based on an estimation of costs and activity levels.

Machine-Hours

A unit of measure representing the operation of machinery over time, typically used for allocating manufacturing overhead costs.

Predetermined Overhead Rate

A rate calculated at the beginning of a period for allocating estimated overhead costs to cost objects based on a chosen activity base.