The Net Income Reported on the Income Statement for the Current

question 8

Multiple Choice

The net income reported on the income statement for the current year was $245000. Depreciation was $40000. Account receivable and inventories decreased by $12000 and $35000 respectively. Prepaid expenses and accounts payable increased respectively by $1000 and $8000. How much cash was provided by operating activities?

• A) $296000
• B) $339000
• C) $323000
• D) $311000

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Definitions:

Machine-Hours

A measure of the amount of time machines are operated in the production process, commonly used as an activity base in cost allocation.

Variable Manufacturing Overhead

Costs of production that fluctuate with the level of output, such as materials and operational expenses, excluding direct labor and material costs.

Unit Product Cost

The overall expense of manufacturing a single product unit, encompassing direct materials, direct labor, and production overhead costs.

Unit Product Cost

The total cost (direct materials, direct labor, and manufacturing overhead) divided by the number of units produced.