The controller of Excello Manufacturing,Inc.,wants to use ratio analysis to identify the possible existence of idle equipment or the possibility that equipment has been disposed of without having been written off.Which of the following ratios would best accomplish this objective?
A) Depreciation expense/book value of manufacturing equipment.
B) Accumulated depreciation/book value of manufacturing equipment.
C) Repairs and maintenance cost/direct labor costs.
D) Gross manufacturing equipment cost/units produced.
Correct Answer:
Verified
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