Laverde Corporation Has Provided the Following Data The Company's Total Asset Turnover for Year 2 Is Closest

question 97

Multiple Choice

Laverde Corporation has provided the following data: $$\begin{array} { | l | r | r | } \hline & \text { Year } \mathbf { 2 } & \text { Year 1 } \\\hline \text { Inventory } & \$ 185,000 & \$ 200,000 \\\hline \begin{array} { l } \text { Total } \\\text { assets }\end{array} & \$ 1,489,000 & \$ 1,470,000 \\\hline \text { Sales } & \$ 1,220,000 & \\\hline\end{array}$$ The company's total asset turnover for Year 2 is closest to:

• A)1.22
• B)7.60
• C)0.13
• D)0.82

---

Definitions:

Machine-Hours

A measure of the amount of time a machine is operated, used in allocating manufacturing costs based on machine usage.

Underapplied Overhead

A condition where the allocated manufacturing overhead costs are less than the actual overhead costs incurred.

Overapplied Overhead

A situation where the allocated manufacturing overhead cost exceeds the actual overhead incurred.

Direct Labor-Hours

Cumulative hours employees commit to the process of manufacturing.