The following information is taken from the accounting record of Carl Company: A
ID: 2422937 • Letter: T
Question
The following information is taken from the accounting record of Carl Company:
Average Receivables ...........................700,000
Cost of Good Sold................................2,900,000
Sales....................................................8,000,000
Average Inventory...............................1,100,000
Net Credit Sales..................................1,200,000
Operating Income...............................900,000
1. The inventory turnover is:
A. 1.81
B. 2.2
C. 2.64
D. 2.92
E. None of the Above
2. Using the facts in the problem above the operating margin is:
A. .1125
B. .32
C. 1.1
D. 1.6
E. NONE OF THE ABOVE
Explanation / Answer
Inventory Turnover = Cost of Goods Sold/ Average Turnover = 2900000/1100000 2.636364 2.64 The correct option Is C. 2.64 Operating Margin = Operating Income/ Net Sales 900000/8000000 0.1125 The correct option is A. .1125
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