Total Company Has Current Liabilities in the Amount of $1,250,000

question 213

Multiple Choice

Total Company has current liabilities in the amount of $1,250,000 and an acid test ratio of 3 and a current ratio of 7.What amount of quick assets does Total Company have on the balance sheet?

• A)$8,750,000
• B)$ 416,667
• C)$3,750,000
• D)$1,250,000
• E)$2,500,000

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Definitions:

Machine Setups

The preparations and adjustments made to machines before starting a production run, potentially including configuration for different products.

Activity-Based Costing

A costing methodology that assigns expenses to products and services based on the activities that go into producing them.

Manufacturing Overhead

All manufacturing costs that are not direct materials or direct labor, including costs associated with running the factory such as utilities and maintenance.

Overhead Cost

Expenses related to the operation of a business that are not directly tied to a specific product or service, such as utilities and rent.