Figure 18-2
Allende Company Has Developed Capacity Standards -Refer to Figure 18-2

question 2

Multiple Choice

Figure 18-2
Allende Company has developed capacity standards. Information is as follows for a value-added activity: $\begin{array}{lr}\text { Activity capacity acquired } & 60 \\\text { Activity capacity used } & 50 \\\text { Actual activity usage } & 30 \\\text { Standard fixed activity rate } & £ 2,000\end{array}$
-Refer to Figure 18-2. The unused capacity variance is

• A)£20,000 favourable.
• B)£40,000 favourable.
• C)£60,000 favourable.
• D)There is no variance.

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Definitions:

Without Recourse

A financial term indicating that the seller of an asset is not liable if the underlying assets fail to perform as expected.

Maturity Factoring

A form of financing where a business sells its invoices to a factor at a discount for immediate cash, with the collection of funds from customers handled by the factor upon maturity.

Cash Conversion Cycle

A metric that measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

Payables Deferral Period

The amount of time a company takes to pay off its suppliers after receiving goods or services, affecting its cash flow.