A Company Has Two Inspectors, Each Earning a Salary of $75,000.One

question 16

Multiple Choice

A company has two inspectors, each earning a salary of $75,000.One inspector works exclusively on inspecting parts received from outside suppliers, while the other spends 30% of her time inspecting parts and 70% of her time inspecting final products.How much labor cost should be assigned to the activity, inspecting parts?

• A) $100,000
• B) $95,000
• C) $75,000
• D) $96,275
• E) $97,500

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Definitions:

Free Cash Flow

The amount of cash generated by a business after accounting for capital expenditures, essential for maintaining or expanding assets.

Operating Activities

Transactions and events that relate to the principal revenue-generating activities of the company.

Financing Activity

Transactions that result in changes to the size and composition of the equity capital or borrowings of a company, as reported in the cash flow statement.

Financing Activities

Transactions and events that involve changes in the size and composition of the equity and borrowings of a company.