The Following Information Was Available for Hoover Company at December

question 102

Multiple Choice

The following information was available for Hoover Company at December 31, 2010: beginning inventory $90,000; ending inventory $70,000; cost of goods sold $660,000; and sales $900,000. Hoover's inventory turnover ratio in 2010 was

• A) 9.4 times.
• B) 8.3 times.
• C) 7.3 times.
• D) 6.0 times.

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Definitions:

Break-Even Point

The juncture where the overall expenses match the overall income, leading to neither a profit nor a loss.

Fixed Costs

Fixed costs are business expenses that remain constant regardless of production volume, such as rent, salaries, and insurance premiums.

Variable Costs

Costs that change in proportion to the level of goods or services produced by a business.

Net Income

The amount of profit remaining after all expenses, taxes, and costs have been deducted from total revenue.