Which of the Following Is NOT a Decision Tool Based

question 40

Multiple Choice

Which of the following is NOT a decision tool based on working capital?

• A) cash ratio
• B) acid-test ratio
• C) current ratio
• D) dividend payout ratio

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Definitions:

Job-Order Costing System

An accounting system that tracks costs individually for each job, suitable for companies producing unique products or services.

Activity-Based Costing

A costing technique that determines the cost of a product based on the activities involved in its production and the extent to which the product uses those activities.

Manufacturing Overhead

Costs related to the production process that are not directly tied to the product, such as rent for the manufacturing space, utility costs, and salaries for manufacturing management.

Traditional Costing System

A costing method that assigns manufacturing overhead costs to products based on volume metrics such as machine hours or labour hours.