Use the Following Information for Questions 113 and 114 $\bullet$ Purchased Real Estate for $625,000 Cash Which Was Borrowed from Corp.'s

question 131

Multiple Choice

Use the following information for questions 113 and 114.
Smiley Corp.'s transactions for the year ended December 31, 2015 included the following:
$\bullet$ Purchased real estate for $625,000 cash which was borrowed from a bank.
$\bullet$ Sold available-for-sale securities for $500,000.
$\bullet$ Paid dividends of $600,000.
$\bullet$ Issued 500 shares of common stock for $250,000.
$\bullet$ Purchased machinery and equipment for $125,000 cash.
$\bullet$ Paid $450,000 toward a bank loan.
$\bullet$ Reduced accounts receivable by $100,000.
$\bullet$ Increased accounts payable $200,000.
-Smiley's net cash used in investing activities for 2015 was

• A) $750,000.
• B) $375,000.
• C) $250,000.
• D) $125,000.

---

Definitions:

Fixed Overhead

Regular, consistent costs incurred by a business that are not affected by the level of goods or services produced, such as rent and salaries.

Budget Variance

The difference between the budgeted or planned amount of expenses or revenues, and the actual amount incurred or earned.

Predetermined Overhead Rate

A rate calculated before the period begins, used to allocate manufacturing overhead to products based on a specific activity base.

Volume Variance

The difference between planned production volumes and actual production volumes, and its effect on budgeted costs.