Asked by Kennedy McCarthy on Jul 14, 2024
Verified
Division A's sales are?
A) $625,000.
B) $200,000.
C) $125,000.
D) $400,000.
Average Operating Assets
The average value of assets used in the company's operations, calculated over a specific period to assess asset utilization efficiency.
Net Operating Income
The profit generated from a business's normal core operations, excluding deductions of taxes and interest costs.
Turnover
The rate at which inventory is sold and replaced over a particular period, or the total sales volume.
- Evaluate performance measurements like margin and turnover.
- Scrutinize the correlation between sales, operational expenditures, and net operating income concerning overall results.
Verified Answer
MO
Mikayla OkawaJul 19, 2024
Final Answer :
A
Explanation :
Turnover is calculated as Sales divided by Average Operating Assets. For Division A, the turnover is given as 1.25. Using the formula Turnover = Sales / Average Operating Assets, we can calculate Sales = Turnover * Average Operating Assets = 1.25 * $500,000 = $625,000.
Learning Objectives
- Evaluate performance measurements like margin and turnover.
- Scrutinize the correlation between sales, operational expenditures, and net operating income concerning overall results.