Mitchell Corporation Has Current Assets of $1,600,000 Million and Current

question 98

Multiple Choice

Mitchell Corporation has current assets of $1,600,000 million and current liabilities of $750,000.If they pay $350,000 of their accounts payable, what will their new current ratio be?

• A)3.1:1
• B)4.0:1
• C)1.5:1
• D)2.1:1

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Definitions:

Overhead Variance

The difference between the actual overhead costs incurred and the overhead costs applied to products or services.

Actual Overhead

Represents the real costs associated with manufacturing overhead, including expenses such as rent, utilities, and equipment maintenance incurred during production.

Overhead Costs

The indirect costs associated with running a business that cannot be linked to a specific product or service.

Direct Materials

Raw materials that can be directly traced to a finished product and are a part of the manufacturing process.