The Operating Cash Flow Available for Company Use After Purchasing

question 5

Multiple Choice

The operating cash flow available for company use after purchasing the fixed assets that are necessary to maintain current productive capacity is called the

• A) free cash flow
• B) modified cash flow
• C) PPE cash flow
• D) restricted cash flow

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Definitions:

Direct Materials Cost

The cost of raw materials and components used directly in the manufacturing of a product.

Schedule Of Cost Of Goods Sold

A schedule that contains three elements of product costs—direct materials, direct labor, and manufacturing overhead—and that summarizes the portions of those costs that remain in ending Finished Goods inventory and that are transferred out of Finished Goods into Cost of Goods Sold.

Work In Process

Inventory items that are in the production process but not yet completed; often abbreviated as WIP.

Manufacturing Overhead Cost

Manufacturing overhead cost includes all indirect factory-related expenses incurred during the production process, such as maintenance, utilities, and quality control.