Which One of the Following Will Not Affect the Operating

question 49

Multiple Choice

Which one of the following will not affect the operating cycle?

• A) decreasing the payables turnover from 7 times to 6 times
• B) increasing the days sales in receivables
• C) decreasing the inventory turnover rate
• D) increasing the average receivables balance
• E) decreasing the credit repayment times for the firm's customers

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Definitions:

Direct Labor-Hours

The cumulative amount of time employees spend specifically on the creation of goods or services.

Variable Overhead

Costs that fluctuate with production volume, such as utilities or indirect materials, which are not directly tied to any single product.

Direct Materials

Basic substances that can be directly linked to the manufacture of particular products or services.

Direct Labor-Hours

A measure of the amount of time workers spend on a particular job or production process, used to assign labor costs to units of output.