The Following Contains Information from the Records of the Wellborn

question 89

Multiple Choice

The following contains information from the records of the Wellborn Engineers and Architects. Wellborn Engineers and Architects
Selected Financial Information
December 31,2013
$\begin{array}{|l|r|}\hline\text { Current assets } & \$ 74,000 \\\hline \text { Current liabilities } & 44,000 \\\hline \text { Long-term assets } & 95,000 \\\hline \text { Long-term liabilities } & 60,000 \\\hline \text { Total revenues } & 50,000 \\\hline \text { Total expenses } & 30,000\\\hline\end{array}$ What is the current ratio?

• A) 1.58
• B) 2.32
• C) 0.59
• D) 1.68

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Definitions:

Indirect Manufacturing Costs

Expenses related to the production process that cannot be directly traced to individual products, such as utilities or salaries for management.

Contribution Margin

The amount by which a product's sales revenue exceeds its total variable costs, indicating how much contributes to covering fixed costs and generating profit.

Product Costs

The costs directly connected to the creation of a product, including materials, labor, and manufacturing overhead.

Period Costs

Expenses that are not directly tied to the production process and are expensed in the period in which they are incurred, such as selling and administrative costs.