Asset Turnover Is Computed as Follows

question 45

Multiple Choice

Asset turnover is computed as follows:

• A) Sales / Assets
• B) Assets / Sales
• C) Net profit (net income) / Assets
• D) Gross profit / Assets

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Definitions:

Overapplied Manufacturing Overhead

A situation where the allocated manufacturing overhead cost is greater than the actual overhead incurred.

Finished Goods

Products that have completed the manufacturing process but have not yet been sold to customers.

Job Cost System

An accounting system used to track costs specifically by job or order, collecting material, labor, and overhead costs.

Finished Goods Inventory

The stock of completed products that are ready for sale but have not yet been sold.