Each of the Following Is Added to Net Income in Computing

question 196

Multiple Choice

Each of the following is added to net income in computing net cash provided by operating activities except.

• A) amortization expense.
• B) an increase in accrued expenses payable.
• C) a gain on disposal of equipment.
• D) a decrease in inventory.

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Definitions:

Productive Capacity

Productive capacity refers to the maximum output a system, facility, or economy can achieve under ideal conditions over a specific time period.

Fixed Factory Overhead Volume Variance

The difference between the budgeted and actual fixed overhead costs, attributed to variations in production volume.

Normal Capacity

The average level of production that a company can sustain under normal circumstances, considering limitations like time and resources.

Factory Overhead

Refers to the indirect manufacturing costs not directly tied to the production of the product, such as maintenance, utilities, and salary of non-direct labor.