Return on Investment (ROI) Can Be Decomposed into the Asset

question 25

Multiple Choice

Return on investment (ROI) can be decomposed into the asset turnover and the:

• A) gross margin ratio.
• B) profit margin ratio.
• C) operating margin ratio.
• D) contribution margin ratio.

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Definitions:

Overhead Applied

A calculation that allocates a portion of estimated overhead costs to individual units of production based on a predetermined formula.

Overhead Applied

The portion of overhead costs assigned to a specific job or department based on a predetermined rate or method.

Activity-Based Costing

A method of accounting that assigns costs to products based on the activities they require.

Overhead Applied

The allocation of overhead costs to specific products or cost centers based on a predetermined rate or method.