When the Ratio of Expenses Versus Sales Is Used to Express

question 16

Multiple Choice

When the ratio of expenses versus sales is used to express expenses as a percentage of sales, it is called a(n) ________ ratio.

• A) current
• B) operating
• C) quick
• D) None of the above.

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Definitions:

Direct Labor

This refers to the wages and other costs for labor directly involved in the production of goods or the provision of services, not including indirect labor costs such as maintenance.

Differential Profit

The difference in profit between two alternative decisions or time periods.

Allocated Fixed Costs

Fixed costs that are assigned to a specific department, project, or segment of a business.

Discontinuing

The process of ending the production and sales of a product line, business segment, or an entire business.