If Net Sales Is $550,000, Beginning Inventory Is $110,000, and Ending

question 94

Multiple Choice

If net sales is $550,000, beginning inventory is $110,000, and ending inventory is $125,000, how much would be the accounts receivables turnover?

• A) 4.4
• B) 5.0
• C) 4.7
• D) 4.0

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Definitions:

Overhead Allocations

The process of distributing indirect costs (overheads) across various cost objects, such as products or departments, based on predetermined criteria.

Departmental Overhead Rates

Overhead allocation rates used that vary by department within a company, recognizing that different departments incur different amounts of overhead costs.

Direct Labor Hours

The total hours worked by employees who are directly involved in the production of goods or services.

Overhead Allocation Base

A measure or activity, such as direct labor hours or machine hours, used to allocate overhead costs to products or services.