The Following Information Relates to Woolf Unlimited for the Past

question 74

Multiple Choice

The following information relates to Woolf Unlimited for the past two years.

What is the acid-test ratio for the current year?

• A)0.52
• B)0.75
• C)0.78
• D)2.30

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Definitions:

Economies of Scale

The cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale.

Diseconomies of Scale

Increases in cost per unit when output is expanded, often due to inefficiencies arising from becoming too large.

Certified Public Accountants

Professionals who have passed the CPA examination and met all other state certification requirements, authorized to provide accounting services to the public.

Diseconomies of Scale

A situation where, as a firm increases its production, the costs per unit increase.