61.The cost of sales for a company is $400,000 and its net sales are $800,000. What would its stockt

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61.The cost of sales for a company is $400,000 and its net sales are $800,000. What would its stockturn rate be if its average inventory at cost is $100,000? 
 
 

A.3

B.2

C.1

D.8

E.4

62.A farm supply store starting with a $40,000 inventory at cost expects to sell $400,000 (cost of sales) of merchandise in the coming year. It plans to turn over its stock 10 times during the year. How much merchandise must the shop purchase during the year? 
 
 

A.$200,000

B.$400,000

C.$420,000

D.$440,000

E.None of these alternatives is correct.

63.What net sales are required to obtain a stockturn rate of 5–given an average inventory at cost of $100,000 and a gross margin of 50 percent? 
 
 

A.$100,000

B.$1,500,000

C.$600,000

D.$1,000,000

E.$400,000

64.Given the following information, calculate the firm's stockturn rate.

   
 
 

A.7

B.10

C.3

D.6

E.Cannot be determined from data given.

65.Which of the following statements about operating ratios (which can be calculated from operating statements) is TRUE? 
 
 

A.By comparing operating ratios from one period to another, a firm can identify areas that may need special attention.

B.These ratios are often used for control purposes.

C.These ratios are calculated by dividing operating statement items by net sales.

D.By comparing its operating ratios with competitors' ratios, a firm may be able to obtain a better idea of how it is doing.

E.All of these statements about operating ratios are TRUE.

66.If net sales on the operating statement for Brandywine Company were $200,000–and gross sales were $240,000–what would the cost of sales be if the gross margin was 20 percent? 
 
 

A.$140,000

B.$168,000

C.$160,000

D.$120,000

E.Cannot be determined without knowing Brandywine's expenses and net profit.

67.True Blue, Inc.–which had a net profit of $200,000 last year–had a gross margin of 40 percent and expenses of 30 percent. What were its net sales in dollars? 
 
 

A.$700,000

B.$2,000,000

C.$1,000,000

D.$800,000

E.Cannot be determined with data given.

68.If a wholesaler takes a 33.3 percent markup on selling price, what is the approximate markup on cost? 
 
 

A.80%

B.50%

C.20%

D.100%

E.33%

69.If a wholesaler's markup on selling price is 50 percent, what is the markup on cost? 
 
 

A.33 1/3%

B.66 2/3%

C.50%

D.100%

E.Cannot be determined without knowing the dollar amount of the markup.

70.In making a purchase from a wholesaler, a retailer is told that a certain item will earn a 100 percent markup on cost. What markup on selling price will this be? 
 
 

A.75%

B.100%

C.66 2/3%

D.200%

E.50%

 

 

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