Below Is Financial Data for Fawnsworth Industries' Current Year -Refer to the Data for Fawnsworth Industries

question 87

Multiple Choice

Below is financial data for Fawnsworth Industries' current year. $\begin{array}{lr}\text { Net sales on account during year } & \$ 500,000 \\\text { Cost of merchandise sold during year } & 300,000 \\\text { Accounts receivable, beginning of year } & 45,000 \\\text { Accounts receivable, end of year } & 35,000 \\\text { Inventory, beginning of year } & 90,000 \\\text { Inventory, end of year } & 110,000\end{array}$
-Refer to the data for Fawnsworth Industries. Based on this information, what is Fawnsworth's inventory turnover ratio for the current period?

• A) 1.67 times
• B) 2.73 times
• C) 0.33 times
• D) 3.00 times

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Definitions:

Direct Labor Cost

An alternate term for direct labor, emphasizing the expense associated with the wages and benefits paid to production workers.

Manufacturing Overhead

Indirect factory-related costs that are incurred when a product is manufactured, including costs related to maintenance, utilities, and equipment depreciation.

Total Manufacturing Costs

The sum of all expenses related to the production of goods, including raw materials, labor, and overhead costs.

Manufacturing Overhead Applied

The allocation of manufacturing overhead costs to products based on a predetermined rate or activity base.