Pepsi's Accounts Receivable Turnover Was 9

question 13

Multiple Choice

Pepsi's accounts receivable turnover was 9.9 for this year and 11.0 for last year.Coca-Cola's turnover was 9.3 for this year and 9.3 for last year.These results imply that:

• A)Coke has the better turnover for both years.
• B)Pepsi has the better turnover for both years.
• C)Coke's turnover is improving.
• D)Coke's credit policies are too loose.
• E)Coke is collecting its receivables more quickly than Pepsi in both years.

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Definitions:

Prime Cost

The direct costs of manufacturing an item, which include direct materials and direct labor costs, but exclude overhead costs.

Conversion Cost

The total expenses of direct labor plus manufacturing overheads used to transform raw materials into finished products.

Cost of Goods Manufactured

The total cost of materials, labor, and manufacturing overhead used to produce goods over a specific period.

Cost of Goods Sold

The expenses directly tied to the manufacture of products sold by a business, encompassing both materials and wages.