A Component of Operating Efficiency and Profitability, Calculated by Expressing

question 202

Multiple Choice

A component of operating efficiency and profitability, calculated by expressing Net Income as a percent of Net Sales, is the:

• A)Acid-test ratio.
• B)Merchandise turnover.
• C)Price earnings ratio.
• D)Accounts receivable turnover.
• E)Profit margin ratio.

Calculate and analyze revenue volume and price variances and their impacts on total revenue.

Apply standard cost and variance analysis concepts to service businesses.

Understand the effects of variances on financial statements and how to report them.

Calculate and analyze the budgeted variable factory overhead based on actual production.

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Definitions:

Marginal Costs

Marginal costs represent the change in total production cost that arises when the quantity produced is incremented by one unit, essentially the cost of producing one additional unit of a good.

Marginal Productivity

Marginal productivity is the additional output that is produced by using one more unit of a certain input, assuming that all other inputs remain constant.

Total Output

The complete quantity of goods or services produced by a company, sector, or economy within a given period.

Extra Inputs

Additional resources or factors of production, such as labor or materials, that are used to increase output or efficiency.