Indirect Materials

question 46

Multiple Choice

Indirect materials:

• A) Flow into the overhead account
• B) Can be traced to each product
• C) Are always material in amount
• D) Are ignored in job costing

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Definitions:

Present Value

The monetary value as of now of future payments or a lump sum, calculated with a certain interest rate.

Discount Rate

Used in discounted cash flow analysis, this rate aids in calculating the present worth of cash flows anticipated in the future.

Cash Flows

The aggregate of all monetary exchanges into and out of a business endeavor, directly affecting its operational cash levels.

Discount Rate

The interest rate used in discounted cash flow forecasts to decipher the present value of prospective cash flows.