Recall That the Fixed Asset Turnover Ratio Equals Net Sales

question 35

Multiple Choice

Recall that the Fixed Asset Turnover Ratio equals Net Sales Revenue divided by Average Net Fixed Assets.Assume that,prior to preparing adjusting entries at the end of the year,Caterpillar Corporation has a fixed asset turnover ratio of 3.4 based on average net fixed assets of $500,000,000.Which of the following year-end adjustments would cause Caterpillar's fixed asset turnover ratio to increase?

• A)Caterpillar accrues and capitalizes $50,000 of interest for self-constructed assets.
• B)Caterpillar accrues a liability for ordinary repair costs in the amount of $50,000.
• C)Caterpillar writes-down an impaired piece of equipment by $50,000.
• D)None of the answers are acceptable.

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Acknowledge the challenges and strategies related to global brand name management.

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Describe the process of exchange control and its impact on global business activities.

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Definitions:

Batches

Groups or sets of goods that are processed or produced together within a production cycle or process.

Overhead Costs

Overhead costs refer to the indirect expenses related to the operation of a business, such as utilities, rent, and administrative salaries.

Activity-Based Costing

A technique in cost accounting which allots overhead and indirect costs to related products and services, dependent on the activities they engage in.

Activity Cost Pools

Groups of individual costs driven by the same cost drivers, used in activity-based costing to allocate costs more accurately.