The Expected Rate of Return on Capital Is Found by Dividing

question 186

True/False

The expected rate of return on capital is found by dividing the expected resource cost per year by the marginal revenue product.

---

Definitions:

Standard Cost

An estimated or pre-determined cost of manufacturing a product or performing a service, used for budgeting and performance evaluation.

Variable Manufacturing Overhead

Indirect production costs that fluctuate with the level of production output, such as utilities for the manufacturing plant.

Direct Labor-Hours

The total number of hours worked by employees directly involved in manufacturing goods or providing services.

Direct Materials Purchases Variance

A measure used in managerial accounting to compare the actual cost of direct materials to the expected cost.