Managers Only Use the Cash Flow Statement to Evaluate the Net

question 231

True/False

Managers only use the cash flow statement to evaluate the net cash increase or decrease, and do not pay much attention to the details of cash flows from operating activities, cash flows from investing activities, and cash flows from financing activities.

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Definitions:

Cost Of Goods Manufactured

The total cost of making and finishing a product.

Variable Manufacturing Costs

Expenses that vary proportionally with production volume, such as materials and labor.

Variable Costing

A costing method where only variable production costs are included in product costs, with fixed overhead costs treated as period expenses.

Direct Materials

Raw materials that can be directly traced to the manufacturing of a product and are a significant portion of the production cost.