Liquidity Ratio: Bathez Company Has Receivables of $334,227, Inventory of $451,000

question 77

Multiple Choice

Liquidity ratio: Bathez Company has receivables of $334,227, inventory of $451,000, cash of $73,913, and accounts payables of $469,553. What is the company's current ratio?

• A) 1.83
• B) 0.73
• C) 1.67
• D) None of the above

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Definitions:

Assembly Department

A section of a manufacturing facility where components are put together to form a finished product.

Single Plantwide Factory Overhead Rate

A single rate used to allocate factory overhead costs to products, calculated by dividing total overhead costs by a base, usually total direct labor hours or machine hours.

Direct Labor Hours

The total hours worked by employees that can be directly associated with the production of goods or services.

Single Plantwide Overhead Rate

A cost allocation method that applies the same overhead rate to all products, regardless of the department where they were produced or the amount of overhead they actually incurred.