Bent Company Reports a $20,000 Increase in Inventory and a $5,000

question 29

Multiple Choice

Bent Company reports a $20,000 increase in inventory and a $5,000 decrease in accounts payable during the year. Cost of Goods Sold for the year was $190,000. Using the direct method of reporting cash flows from operating activities, cash payments made to suppliers were

• A) $190,000.
• B) $205,000.
• C) $215,000.
• D) $175,000.

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Definitions:

Average Variable Cost

The variable cost per unit of output, calculated by dividing total variable costs by the total output.

Total Fixed Costs

The total of all expenses that do not change with the amount of production or level of business operations.

Equilibrium Level

The state in which market supply and demand balance each other, resulting in stable prices.

Total Costs

The sum of all expenses a firm incurs to produce and sell a product, including both fixed and variable costs.