When a Firm Has Excessive Cash,managers May Make Use of the Funds

question 79

Multiple Choice

When a firm has excessive cash,managers may make use of the funds in an inefficient manner.This is also referred to as the ________ cost of retaining cash.

• A)fixed
• B)agency
• C)interest
• D)special
• E)hidden

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Definitions:

Labor Standards

Standards specifying the amount of time needed to complete a specific task or produce a set quantity of products.

Fixed Manufacturing Overhead

Indirect manufacturing costs that remain constant regardless of the level of production, such as salaries of managers and depreciation of factory equipment.

Standard Machine-Hours

The predetermined amount of machine time estimated or allocated for the production of a unit or batch of products, used for costing and efficiency measurements.

Variable Overhead Rate

The ratio of variable overhead costs to a related activity driver, often used in cost accounting.