The Proportion of an Overhead Activity Consumed by a Product

question 53

Multiple Choice

The proportion of an overhead activity consumed by a product is the

• A) overhead ratio.
• B) consumption ratio.
• C) quick ratio.
• D) fixed ratio.

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Definitions:

Corporations

A business firm owned by shareholders who possess ownership rights to the firm’s profits, but whose liability is limited to the amount of their investment in the firm.

Partnerships

A legal form of business operation between two or more individuals who share management and profits.

Principal-Agent Problem

A dilemma in economics occurring when one party (the agent) is able to make decisions and/or take actions on behalf of, or that impact, another party (the principal).

Profit-Sharing Plans

A company program that gives employees a share in the profits of the company.