The 2012,2013,and 2014 Partial Balance Sheets for Ottoman Manufacturing Company

question 82

Multiple Choice

The 2012,2013,and 2014 partial balance sheets for Ottoman Manufacturing Company appear below. Sales revenue for Ottoman was $126,000 for 2012,$120,000 for 2013 and $114,000 for 2014 while cost of goods sold was $84,000 for 2012,$82,400 for 2013 and $72,500 for 2014.
What is the inventory turnover for 2013?

• A)2.75 times
• B)3.17 times
• C)4.00 times
• D)4.14 times

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Definitions:

Product Cost

The total cost associated with making or acquiring a product, including direct materials, direct labor, and overhead.

Period Cost

Costs that are not directly tied to the production process and are expensed in the period they are incurred, such as selling, general, and administrative expenses.

Fixed Cost

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance premiums.

Variable Cost

A cost that varies with the level of output or sales, such as materials and labor directly involved in production.