What Is the Preferred Method to Generate Cash in a Firm

question 35

Multiple Choice

What is the preferred method to generate cash in a firm?

• A)Operating activities.
• B)Investing activities.
• C)Financing activities.
• D)Investing and financing activities.

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Definitions:

Target Denominator Level

A predetermined level of activity (such as machine-hours or labor-hours) used to allocate fixed overhead costs to individual units of production.

Volume Variance

A metric that measures the difference between the budgeted and actual volume of production or sales, often reflecting changes in demand or efficiency.

Economic Impact

The effect of an event, policy, or program on the economy of a given area, ranging from a local community to the global economy.

Denominator Level

In cost accounting, it refers to the level of activity or volume that is used to calculate the fixed cost per unit during a specific period.