What Is the Business Term Given for a Company That

question 74

Multiple Choice

What is the business term given for a company that generates cash flows over and above its internal requirements and can provide the corporate parent with funds for reinvestment?

• A) Cash hog.
• B) Cash cow.
• C) Cash flow.
• D) Free cash flow.
• E) Cash generator.

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Definitions:

Idle Capacity

Unused production capability in a manufacturing process or facility.

Plantwide Overhead Rate

A single overhead rate calculated for an entire manufacturing plant, used to allocate indirect costs to products based on a common base such as labor hours or machine hours.

Activity-Based Costing

A cost accounting method that assigns costs to products or services based on the activities that go into producing them.

Manufacturing Overhead

Expenses related to the production process that are not directly tied to a specific product, including utilities, depreciation, and maintenance of equipment.