The Period of Time During Which Either Liquidity Reserves or External

question 186

Multiple Choice

The period of time during which either liquidity reserves or external funding is needed to maintain company operations is called the:

• A) Accounts payable period.
• B) Operating cycle.
• C) Cash cycle.
• D) Accounts receivable period.
• E) Inventory period.

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Definitions:

Fixed Inspection Cost

A cost that remains constant for a specific period regardless of the level of goods produced or inspected.

Machine-Hours

Machine-hours are a measure of the amount of time a machine is operated, used in manufacturing to allocate costs to products.

Relevant Range

It refers to the span of activity within which the assumptions about fixed and variable cost behaviors hold true.

Contribution Margin

The amount of revenue left after deducting all variable costs associated with producing and selling a product, indicating how much contributes towards covering fixed costs and generating profits.