The Following Information Pertains to Ortiz Company What Is the Inventory Turnover for Ortiz?
A) 3,2 Times

question 79

Multiple Choice

The following information pertains to Ortiz Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. . $\begin{array}{lr}\text { Assets }\\\text { Cash and short-term investments } & \$ 45,000 \\\text { Accounts receivable (net) } & 25,000 \\\text { Inventory } & 12,000 \\\text { Property, plant and equipment } & 210,000 \\\quad \text { Total Assets } & \$ 292,000\\\\\text { Liabilities and Stockholders' Equity }\\\text { Current liabilities } & \$ 50,000 \\\text { Long-term liabilities } & 90,000 \\\text { Stockholders' equity?common } & 152,000 \\\quad \text { Total Liabilities and Stockholders' Equity } & \$ 292,000 \\\\\text { Income Statement }\\\text { Sales } & \$ 120,000 \\\text { Cost of goods sold } & 66,000 \\\text { Gross profit } & 54,000 \\\text { Operating expenses } & 30,000 \\\text { Net income } & \$ 24,000 \\\\\text { Number of shares of common stock } & 6,000 \\\text { Market price of common stock } & \$ 20 \\\text { Dividends per share } & .50\end{array}$ What is the inventory turnover for Ortiz?

• A) 3,2 times
• B) 5.5 times
• C) 11 times
• D) 0.18 times

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Definitions:

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the standard variable overhead assigned to the production based on the actual activity levels.

Total Variable Overhead Spending Variance

The overall difference between actual and budgeted variable overhead costs based on the changes in the level of activity.

Variable Overhead

Costs that fluctuate with the level of production output, including indirect expenses like power and materials needed for maintenance and operations.

Direct Labor-hours

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