A Higher Price/earnings Ratio Signifies a Higher Return on Investment

question 52

True/False

A higher price/earnings ratio signifies a higher return on investment.

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Definitions:

Variable Manufacturing Overhead

Refers to the production costs that fluctuate with the level of output, such as utility costs or raw materials, which are not directly tied to individual units.

Materials Quantity Variance

The difference between the expected and actual quantity of materials used in production, impacting materials cost.

Standard Quantity

This represents the expected amount of materials or inputs needed to produce a unit of product under normal conditions.

Actual Output

Actual output is the factual quantity of goods or services produced within a specified time frame, representing productivity.