The Following Selected Account Balances Appeared on the Financial Statements

question 90

Multiple Choice

The following selected account balances appeared on the financial statements of the Washington Company: The Washington Company uses the direct method to calculate net cash flow from operating activities.
Cash collections from customers are

• A) $56,000
• B) $52,000
• C) $60,000
• D) $45,000

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Definitions:

Bottleneck Operations

Stages in the production process that limit the overall output because they have a lower capacity compared to other stages.

Contribution Margin

The amount remaining from sales revenue after variable costs have been deducted, indicating how much contributes to covering fixed costs and generating profit.

Constrained Resources

Resources that limit the company's ability to produce goods or services, often resulting in bottlenecks in the production process.

Opportunity Cost

The benefit, profit, or value of something that must be given up to acquire or achieve something else.