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Consolidated financial statements are required by GAAP in certain circumstances.This information can be very useful to stockholders and creditors.Yet,there are limitations to these financial statements for which the users must be aware.What are at least three (3)limitations of consolidated financial statements?
Marginal Revenue Product
The additional revenue generated from employing one more unit of a factor of production, holding all other inputs constant.
Variable Input
An input in the production process that changes in quantity with the level of output, such as raw materials or labor hours.
Wage
The fixed regular payment, typically calculated on an hourly, daily, or piecework basis, made by an employer to an employee.
Marginal Product
The additional output that is produced by adding one more unit of a specific input, keeping all other inputs constant.
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