Which of the Following Properly Links the Factors Affecting a Firm's

question 21

Short Answer

Which of the following properly links the factors affecting a firm's ability to generate cash with its need to use cash in operations?
$\begin{array}{lll}& \underline {\text { Ability to generate cash}}&\underline {\text { Need to use cash}}\\a. &\text { Profitability of goods and services sold }& \text { Working capital requirements}\\b. &\text { Sales of existing plant assets }& \text { Plant capacity requirements}\\c. & \text { Borrowing capacity} & \text { Debt service requirements}\\d. & \text { Profitability of goods and services sold }& \text { Debt service requirements}\\\end{array}$

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Definitions:

First Stage Allocations

The process in cost accounting where overhead costs are allocated to various cost pools or departments.

Processing Costs

Expenses involved in converting raw materials into finished products, including labor, overheads, and equipment usage.

Equipment Depreciation

The reduction in value of equipment over time due to wear and tear or obsolescence.

Supervisory Expense

Costs associated with managing and overseeing employees or departments, not directly tied to production or service delivery.