Neptune Pool Company Is Involved in a Number of Competitive

question 49

Multiple Choice

Neptune Pool Company is involved in a number of competitive bidding situations.The following costs are anticipated for a project to be bid for Trimex Manufacturing:
Which of these costs would be treated differently if Neptune had either excess capacity or no excess capacity?

• A)Direct materials used,$680,000.
• B)Direct labor,$2,450,000.
• C)Allocated variable overhead,$570,000.
• D)Allocated fixed cost,$230,000.
• E)None of these,as all four costs are considered in both situations.

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Definitions:

Cash Flowing

The movement of funds in and out of a business, indicating its operating, investing, and financing activities.

Expenses

Amounts used to generate revenue; assets used up or services consumed in the process of generating revenues.

Net Discounted Cash Flow

The value of all future cash flows of a project or investment after being discounted to the present value, reflecting both time and risk.

Cash Flowing

The movement of money in and out of a business, representing its operational liquidity.