Which of the Following Is an Example of an Operating

question 68

Multiple Choice

Which of the following is an example of an operating activity?

• A)Obtaining capital from owners
• B)Selling goods and services to customers
• C)Purchasing equipment
• D)Selling land

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Definitions:

Fixed Overhead Budget

A plan for the fixed costs involved in operating a business, which do not vary with levels of production or sales.

Standard Machine-Hours

The predetermined amount of time that machines are expected to operate to produce a set quantity of goods.

Variable Overhead Rate

Variable overhead rate is the ratio of variable overhead costs incurred for every unit of activity or a specific measure of activity, such as labor hours.

Direct Labor-Hours

The total hours worked by employees directly involved in the manufacturing process or production of goods and services.