Inventory Turnover

question 34

Multiple Choice

Inventory turnover:

• A) is calculated by dividing accounts receivable by net sales
• B) equals total assets minus current assets divided by average inventory
• C) is calculated by dividing net profit by average retail inventory
• D) equals net sales minus cost of goods sold divided by average turnover
• E) is none of these

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Definitions:

Marginal Revenue

The additional income earned by producing and selling one more unit of a product or service.

Marginal Revenue

The additional revenue that a firm receives from selling one more unit of a good or service.

Marginal Cost

The cost of producing one additional unit of a product, often used to decide the amount of production.

Profit Maximizing

A company's strategy aiming to achieve the highest possible profit given its products, market conditions, and operational costs.