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Lunna [17]
3 years ago
7

A business would like to invest in a new product, but they are short on extra

Business
1 answer:
elixir [45]3 years ago
4 0

Answer:

B. Liquidate some inventory to increase cash flow.

Explanation:

Inventory refers to the items meant for sale. Liquidating is converting assets into cash. Liquidating inventory means selling some inventory to generate cash.  The business has enough inventory to last for months. Since the firm needs cash now, its best option is to sell some of its inventory.

Having inventory that can last for months is tying up resources that could be used in other ways. Keeping high levels of inventory is not prudent. It is not an investment that can generate more income. There is also the risk of theft and damages.

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Craigmont company's direct materials costs are $4,900,000, its direct labor costs total $8,710,000, and its factory overhead cos
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Craigmont company's direct materials costs are $4,900,000, its direct labor costs total $8,710,000, and its factory overhead costs total $6,710,000. its prime costs total:_Prime Cost = direct material cost + Direct Labor cost

= $ 4900000 + $ 8710000

= $ 13610000

A high price is the entire direct price of production, such as uncooked materials and exertions. indirect charges, along with utilities, supervisor salaries, and delivery costs, are not blanketed in top charges. corporations want to calculate the prime value of each product manufactured to ensure they are generating earnings.

Industry averages propose top charges need to be between fifty five% and 60%. Years in the past, that range might have been as high as sixty five%. however as the costs of a lease, coverage, and items have risen, it is grown to be extra vital to hold that percent quite tight within that variety.

Learn more about prime cost here:

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