Which of the Following Results in a Decrease in Working

question 3

Multiple Choice

Which of the following results in a decrease in working capital?

• A)Supplies purchases with cash.
• B)Purchase of a truck in exchange for factory machinery.
• C)Acquisition of land in exchange for stock.
• D)Purchase of equipment with cash.

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Definitions:

Fixed Manufacturing Cost

A type of overhead cost that does not change with the level of production, such as rent, salaries, and insurance.

Units Produced

Units produced refers to the total number of completed units of a product that a company has manufactured within a specific period.

Direct Costs

Expenses that can be directly attributed to a specific product, job, or project.

Conversion Costs

Expenses related to transforming raw materials into finished products, encompassing both labor efforts and overhead charges.