If Cash Flows from Operating Activities Is a Positive Amount,then

question 127

Multiple Choice

If cash flows from operating activities is a positive amount,then:

• A)The amount will be shown on the statement of cash flows in parentheses.
• B)The company must have had a net profit for the year.
• C)The company must have paid off more debts than it earned during the year.
• D)The company may still have a decrease in the total amount of cash for the period.

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Definitions:

Direct Materials Cost Variance

A measure that evaluates the difference between the actual costs of direct materials used in production and the standard costs.

Direct Materials Price Variance

Direct materials price variance is the difference between the actual cost of direct materials used in production and the standard cost, indicating how much more or less was spent than expected.

Direct Materials Quantity Variance

The difference between the actual quantity of materials used in production and the standard quantity expected, multiplied by the standard cost per unit.

Flexible Budget Sales

Projected sales figures that can adjust based on changes in production levels or market conditions.