(select) measures how much it costs in overhead to generate $1 of revenue. This ratio may not be a

(select) measures how much it costs in overhead to generate $1 of revenue. This ratio may not be a meaningful measure of cost control because it provides no information regarding whether a specific expenditure is appropriate. Specifically, if an expenditure won’t produce revenue for several years, it may increase the ratio suggesting that it is not appropriate when actual savings or revenue generated is delayed and the expenditure might be an attractive one.