The Amount of Cash Flow from Operating Activities That Would

question 154

Multiple Choice

The amount of cash flow from operating activities that would appear on the 2012 statement of cash flows is:

• A) $24,000.
• B) $25,000.
• C) $17,000.
• D) $21,000.

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Definitions:

Variable Cost

Costs that change in proportion with the level of production or business activity, such as materials and labor directly involved in production.

Activity

Refers to any action or task performed within an organization that consumes resources.

Relevant Range

The range of activity over which a company expects its operating assumptions, such as cost behavior and sales mix, to remain valid, influencing budgeting and financial planning.

Fixed Costs

Costs that do not vary with the level of production or business activity, remaining constant even when output changes.