Service-oriented companies have different needs than product-oriented companies when analyzing financial statements. REQUIRED: Why is this true? Give an example of a financial ratio that is meaningless to a service business
Because service-oriented companies do not sell a tangible product, they instead must sell their professional expertise and rely on alternative measures of their efficiency in marketing their services. For example, an law firm would keep detailed records of the hours worked on each client's case, monthly billings to each client, and the ratio of these billings to the average costs incurred on each case. Therefore, ratios like inventory turnover would be meaningless to a service business, like a law firm or a public accounting firm.
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A credit means that
a. the event has an effect on the right side of an account. b. the event is unfavorable. c. the event is favorable. d. the event always decreases the account.
Improving business processes by reengineering them, benchmarking specific activities against industry leaders, encouraging employee input to identify excess costs, increasing capacity utilization, and improving employee productivity lead to a significant overall gain. These are examples of which turnaround strategy used by successful companies?
A. asset and cost surgery B. global expansion C. piecemeal productivity improvements D. selective product and market pruning
If the fixed cost to produce an item is $500, labor is $2.00 per unit and materials are $2.50 per unit,
then the unit cost for an order of 1,000 would be: A) $6.50. B) $504.50. C) $5,000. D) $5.00.
The acceptance of an offer to form a contract may be communicated in any "reasonable" way and be effective, in most instances
a. True b. False Indicate whether the statement is true or false