From the Following Choices, Select the Answer That Describes the Effect

question 149

Multiple Choice

From the following choices, select the answer that describes the effect on working capital as a result of the transaction.
-Collected an account receivable

• A)Working capital will increase
• B)Working capital will decrease
• C)Working capital will not change

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Definitions:

Contribution Margin

The gap between sales income and variable expenses, showing the amount that goes towards covering fixed expenses and creating earnings.

Manufacturing Overhead Cost

refers to the indirect factory-related costs that are incurred when a product is manufactured, such as utilities, maintenance, and factory equipment depreciation.

Units Produced

The total number of complete units a company produces within a given period.

Product Costs

Costs that are directly associated with the creation of a product, including direct labor, materials, and manufacturing overhead.