If a fiRm Is at Full-Capacity Sales, It Means the fiRm

question 232

Multiple Choice

If a firm is at full-capacity sales, it means the firm is at the maximum level of production possible without increasing:

• A) Net working capital.
• B) Cost of goods sold.
• C) Inventory.
• D) Fixed assets.
• E) The debt ratio.

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Definitions:

Tender

An offer by a party in a contract to perform, along with being ready, willing, and able to perform, a duty outlined in that contract.

Conforming Goods

Goods that meet the specifications and quality standards outlined in a purchase contract.

Course of Dealing

The behavior and pattern of actions between parties that establishes a common basis for understanding their conduct in executing agreements.

Nonconforming Goods

Goods delivered under a sales contract that fail to meet the quality or specifications agreed upon by the seller and buyer.