Ajax Corporation's Total Current Assets Are Valued at $135,000 and Are

question 104

Multiple Choice

Ajax Corporation's total current assets are valued at $135,000 and are comprised of cash, accounts receivable and inventory. Determine the value of the cash account given the following information:
Sales = $800,000; cost of goods sold = $300,000; accounts receivable turnover = 32 times;
Inventory turnover = 10 times.

• A) $70,000
• B) $75,000
• C) $80,000
• D) $85,000
• E) $90,000

Identify the appropriate activity measure for overhead allocation.

Calculate total overhead costs at different levels of activity.

Determine predetermined fixed overhead rates.

Define overhead application and its significance on product cost.

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Definitions:

Par Common Stock

The face value of a share of stock as stated in the corporate charter.

Cost Method

An accounting method used to value inventory or investments at their original purchase cost.

Treasury Stock

Shares initially offered by a company and then purchased again by that company, lowering the volume of shares that are actively traded on the market.

Par Common Stock

The face value of common stock as stated in the corporate charter, which has no direct correlation to the market value.