Which of the Following Formulas Is the Investment Turnover Factor

question 144

Multiple Choice

Which of the following formulas is the investment turnover factor as used in determining the rate of return on investment?

• A) Invested assets / Sales
• B) Income from operations / Invested assets
• C) Income from operations / Sales
• D) Sales / Invested assets

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Definitions:

Period Cost

Costs that are expensed in the period in which they are incurred, typically related to selling, general, and administrative activities rather than production.

Selling and Administrative Expense

The combined total of all expenses directly related to the selling of products and the administration of a business.

Direct Materials

Raw materials that can be directly traced to the production of a specific product and are an integral part of the finished product.

Transportation Out

Transportation out refers to the costs associated with delivering goods from a seller to a buyer, often recognized as a selling expense.