Net Sales ∕ Net Fixed Assets

question 16

Multiple Choice

Net sales ∕ Net fixed assets

• A) Total asset turnover
• B) Fixed assets turnover
• C) Average collection period
• D) Inventory turnover

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Definitions:

Depreciation Expense

Spreading out the price of a tangible asset over the period it can be used.

Variable Cost

The costs that vary directly with the level of production or with the volume of services provided.

Fixed Cost

Expenses that remain constant for a company regardless of its level of production or sales volume, such as leases and managerial salaries.

Salvage Company

A firm that specializes in recovering and processing materials from failed projects or discarded products.