Assume the Following Data: Total Current Assets = $852; Total

question 26

Multiple Choice

Assume the following data: Total current assets = $852; Total current liabilities = $406; Long-term debt = $442. Calculate net working capital.

• A)$446
• B)$852
• C)$410
• D)$4

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Definitions:

Cost-Volume-Profit Chart

A graphical representation that shows the relationship between a company's costs, sales volume, and profits.

Operating Leverage

The degree to which a firm or project can increase operating income by increasing revenue, a measure of how revenue growth translates into growth in operating income.

Variable Costing

A managerial accounting method that includes only variable production costs (materials, labor, and overhead) in product costs, treating fixed manufacturing overhead as an expense of the period.

Absorption Costing

An accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.