Asked by Michael McGuire on Jul 24, 2024
Verified
Division B's average operating assets are?
A) $81,200.
B) $2,080,000.
C) $1,333,333.
D) $130,000.
Operating Assets
Assets used in the day-to-day operations of a business to generate revenue, excluding investments and non-operational assets.
Net Operating Income
The profit a company generates from its core business operations, excluding taxes and interest.
- Understand the significance of turnover when assessing the performance of a division.
Verified Answer
RR
Recya RobertsonJul 30, 2024
Final Answer :
D
Explanation :
Division B's average operating assets can be calculated using the formula for turnover, which is Sales / Average Operating Assets. Given that Division B has a turnover of 4 and sales of $520,000, we can rearrange the formula to solve for Average Operating Assets: Average Operating Assets = Sales / Turnover = $520,000 / 4 = $130,000.
Learning Objectives
- Understand the significance of turnover when assessing the performance of a division.
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