During 2007,Company X Sells 500,000 Units for $8 Each

question 80

Essay

During 2007,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 1,2007 and $890,000 in fixed assets on December 31,2007.
a.Calculate net sales revenue.
b.Calculate average fixed assets.
c.Calculate the fixed asset turnover ratio.
d.Assume the 2007 fixed asset turnover ratio was lower than the 2006 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:

Liter

A metric unit of volume equal to 1000 cubic centimeters or approximately 0.26 U.S. gallons.

Root

The section of a plant that is usually found beneath the soil, responsible for absorbing water and nutrients.

Prefix

An affix placed before a word to modify its meaning, such as re-, un-, or anti-.

-poiesis

A suffix meaning the formation, production, or generation of something, such as in 'hemopoiesis' the production of blood cells.