During 2018,Company X Sells 500,000 Units for $8 Each

question 80

Essay

During 2018,Company X sells 500,000 units for $8 each.Sales discounts are $100,000 and sales returns and allowances are $300,000.The company reported a total of $710,000 in fixed assets on January 1,2018 and $890,000 in fixed assets on December 31,2018.
a.Calculate net sales revenue.
b.Calculate average fixed assets.
c.Calculate the fixed asset turnover ratio.
d.Assume the 2018 fixed asset turnover ratio was lower than the 2017 ratio.Describe one circumstance where this change would indicate bad news and one circumstance where this change would be consistent with good news.

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Definitions:

Time And Motion Studies

The analysis of work processes through the observation and timing of tasks to improve efficiency.

Globalised World

A world where nations, economies, and cultures have become interconnected and interdependent due to globalization.

Labour Markets

The supply and demand dynamics of workers, where employers seek to hire labor and individuals offer their skills and abilities in exchange for compensation.

Business Dealings

The formal relations and transactions conducted between businesses or between businesses and individuals.