The Calculation of Free Cash Flow Could Include All of the Following

question 106

Multiple Choice

The calculation of free cash flow could include all of the following except

• A)cash purchases of plant assets.
• B)net cash flows from operating activities.
• C)net income.
• D)dividends paid.

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Definitions:

Predetermined Overhead Allocation Rate

This rate is calculated before the accounting period begins and is used to allocate overhead costs to products or services based on a specific activity base.

Direct Labor Cost

The wages and benefits paid to workers who are directly involved in the production of goods.

Equivalent Units

A term used in cost accounting to represent a conversion of partially completed goods into a number of fully completed units.

Direct Materials

Raw materials that are directly traceable to the production of a specific good or service and directly incorporated into the final product.