Department X Began the Current Year with $26,000 in Inventory

question 8

Multiple Choice

Department X began the current year with $26,000 in inventory. During the year, Department X net purchases amounted to $72,000 and its ending inventory was $13,600. Sales during the year totaled $162,000, other direct expenses were $33,800, and total indirect expenses of $24,200. Department X's contribution margin is

• A)$84,400.
• B)$43,800.
• C)$77,600.
• D)$53,400.

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Definitions:

Fixed Expenses

Costs that do not change with the level of production or sales over a short period.

Turnover

A measure of the efficiency and effectiveness of a company's operations, often calculated as total revenues divided by total assets.

Operating Assets

Assets used by a company in its day-to-day operations to generate revenue, including cash, inventory, and equipment.

Turnover

In business, the total volume of sales or revenue made within a specified period. It can also refer to the rate at which employees leave a workforce and are replaced.