The Following Information Is Available for Compton Company The Inventory Turnover Ratio for 2013 Is
A)6

question 169

Multiple Choice

The following information is available for Compton Company: $\begin{array}{lrr}&2013&2012\\\text { Accounts receivable } & \$ 360,000 & \$ 400,000 \\\text { Inventory } & 340,000 & 420,000 \\\text { Net credit sales } & 2,470,000 & 1,400,000 \\\text { Cost of goods sold } & 1,860,000 & 1,060,000 \\\text { Net income } & 300,000 & 170,000\end{array}$ The inventory turnover ratio for 2013 is

• A)6.2 times.
• B)4.9 times.
• C)5.5 times.
• D)4.4 times.

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Definitions:

Sales Volume

The quantity of products or services sold by a company during a certain period of time.

Cost Advantage

The benefit or upper hand a business gains when it can provide a product or service at a lower price than its competitors, often through efficiencies, economies of scale, or lower input costs.

Fixed Cost

A business expense that remains constant regardless of the level of production or business activity, such as rent or salaries.

Variable Cost

Costs that change in proportion to the level of activity or volume of goods produced.