If the Operating Asset Turnover Increased by 50 Percent and the Margin

question 55

Multiple Choice

If the operating asset turnover increased by 50 percent and the margin increased by 50 percent, the ROI would increase by

• A)50 percent.
• B)25 percent.
• C)100 percent.
• D)125 percent.

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Definitions:

Activity-Based Costing

A method of accounting that assigns costs to products or services based on the activities they require, providing more accurate product costing.

Equipment Depreciation

The process of allocating the cost of physical assets used in a business over their useful life, recognizing the wear and tear over time.

Indirect Labor

Workers who provide support to the production process but are not directly involved in creating the product.

Resource Consumption

The amount of resources (such as raw materials, energy, or labor) used by an organization in its operational processes.