Mell CoManufactured 100 Personal Computers at a Cost of $30,000

question 94

Multiple Choice

Mell Co.manufactured 100 personal computers at a cost of $30,000.It can sell them as is for $65,000,or install hard disks in them for $25,000 and sell them for $105,000.The $30,000 original manufacturing cost is:

• A)An out-of-pocket cost because it has already been paid.
• B)A sunk cost because it is not relevant to the decision.
• C)An incremental cost because it is relevant to the decision.
• D)A fixed cost because it will remain the same no matter which action is taken.

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Definitions:

Sources of Float

Sources of float include the time difference between when a payment is initiated and when it is actually cleared and becomes available in a company's bank account, affecting the management of cash flow.

Collection Float

The time period between when a check is deposited and when funds are made available.

Average Daily Float

The average amount of uncollected, in-process funds over a specified period.

Availability Delay

A period where funds or resources are not immediately accessible or ready for use, often due to processing or logistical reasons.