Management Accounting - Study Mode
[#211] An operating income is divided by revenues to calculate
Correct Answer
(C) return on sales
Explanation
Solution: An operating income is divided by revenues to calculate return on sales. Return on sales (ROS) is a measure of how efficiently a company turns sales into profits. ROS is calculated by dividing operating profit by net sales. ROS is only useful when comparing companies in the same line of business and of roughly the same size.
[#212] Sum of all resources used to generate income is classified as
Correct Answer
(C) investment
Explanation
Solution: Sum of all resources used to generate income is classified as investment. An investment is a monetary asset purchased with the idea that the asset will provide income in the future or will later be sold at a higher price for a profit.
[#213] Costs that are incurred to find manufactured products, which does not meet specifications are called
Correct Answer
(C) appraisal costs
Explanation
Solution: Costs that are incurred to find manufactured products, which does not meet specifications are called appraisal costs. Appraisal costs are a specific category of quality control costs. Companies pay appraisal costs as part of the quality control process to ensure that their products and services meet customer expectations and regulatory requirements. These costs could include expenses for field tests and inspections.
[#214] Reduction in setup time, manufacturing cycle efficiency and average time of manufacturing for key products are examples of
Correct Answer
(B) measures of internal business processes
Explanation
Solution: Reduction in setup time, manufacturing cycle efficiency and average time of manufacturing for key products are examples of measures of internal business processes. In other words, internal processes create and deliver the value proposition for customers. Thus objectives in your strategy map's internal process perspective must describe how you intend to accomplish your organization's strategy.
[#215] Employees that are trained to manage bottlenecks, during production operations and employee satisfaction are related to
Correct Answer
(A) measures of growth and learning
Explanation
Solution: Employees that are trained to manage bottlenecks, during production operations and employee satisfaction are related to measures of growth and learning.