Johnny's "Joyride Graphics" "Joyride Graphics", a Graphic Design Company, Is a Dream of a Dream

question 50

Multiple Choice

Johnny's "Joyride Graphics"
"Joyride Graphics", a graphic design company, is a dream of Johnny Jackson, a native of Jacksonville. Being in a rural University town, Johnny knows quite a few people. This situation has put Johnny in a dilemma with his business start-up phase financing. He is really confused about where else he can get money other than his own pocket for his "Joyride Graphics".

-Given that the Joyride Graphics is in a start-up phase,which of these would represent its financial management need?

• A)Building owner's wealth
• B)Profits being secondary to cash flow
• C)Investing to build equity and firm value
• D)Cash for building inventory levels

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Definitions:

Labor Efficiency Variance

A discrepancy between the actual working hours and the expected standard hours, multiplied by the predetermined salary rate.

Direct Labor Standards

Direct labor standards are predetermined measures for the amount of labor time and cost that should be associated with producing a unit of product or performing a service.

Standard Cost Variances

The differences between the actual costs and the standard costs for manufacturing or service processes, used to control and manage expenses.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including material and labor costs.