Use This Balance Sheet and Income Statement to Answer the Following

question 9

Multiple Choice

Use this balance sheet and income statement to answer the following question.Use ending balances whenever average balances are required for computing ratios. The current ratio for National Textile is

• A)1.20.
• B)1.75.
• C).67.
• D)1.50.

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Definitions:

Selling and Administrative Expense Budget

An estimation of the costs related to sales and administrative activities for a specific period, used for planning and control.

Direct Materials

Raw materials that can be directly associated with the production of specific goods or services.

Direct Labor

The wages and benefits paid for labor that is directly involved in the production of goods or the provision of services.

Variable Selling

This term likely refers to variable selling expenses, which are costs that fluctuate with sales volume, such as commissions or shipping fees.