Which of the Following Firms Would Be Expected to Need

question 5

Multiple Choice

Which of the following firms would be expected to need the most cash to conduct its daily operations?

• A) a retail grocery store that sells on a cash only basis
• B) an electronics manufacturer that only assemble its goods once they have been paid for
• C) an airline that has many of its fares pre-paid by cash or credit card
• D) an aircraft manufacturer with large inventory and long development and sales cycles

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Definitions:

Activity-Based Costing

Activity-based costing is an accounting method that assigns costs to products or services based on the activities that go into producing them, thereby giving more accurate insights into the costs and profitability of each.

Facility Sustaining Costs

Expenses incurred to maintain the operational capacity of a physical facility or infrastructure, excluding costs related to direct production activities.

Cleaning

The process of removing contaminants, dirt, and impurities from objects and environments, often for maintaining health and hygiene.

Custodial Work

The cleaning, maintenance, and upkeep tasks performed to manage and maintain buildings and facilities.