An Increase in Which One of the Following Will Increase

question 74

Multiple Choice

An increase in which one of the following will increase operating cash flow for a profitable,tax-paying firm?

• A)Fixed expenses
• B)Interest paid
• C)Net capital spending
• D)Inventory
• E)Depreciation

Analyze the relationship between price changes, demand, and consumption for different products

Understand the concept of elasticity of demand and how it is affected by various factors

Analyze the impact of taxes on market equilibrium and who bears the tax burden

Differentiate between elastic and inelastic demand

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Definitions:

Direct Labor-Hours

A measure of the labor directly involved in manufacturing a product, expressed in hours.

Predetermined Overhead Rate

A pre-determined rate for distributing overhead expenses to products or job orders, calculated prior to the beginning of the period using projected costs and estimated levels of activity.

Direct Labor-Hour

A direct labor-hour is a unit of measurement for the amount of work performed by employees who are directly involved in the production of goods or services.

Fixed Manufacturing Overhead

The costs that do not vary with the level of production or sales, such as salaries of managers, rent of the factory, and depreciation of manufacturing equipment.