Turnover Is Computed by Dividing Average Operating Assets Into

question 5

Multiple Choice

Turnover is computed by dividing average operating assets into:

• A)invested capital.
• B)total assets.
• C)net operating income.
• D)sales.

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Definitions:

Cost-Volume-Profit Analysis

The examination of the relationships among selling prices, sales and production volume, costs, expenses, and profits.

Contribution Margin

The amount of revenue remaining after deducting variable costs, which contributes to covering fixed costs and generating profit.

Gross Profit

The financial metric indicating the difference between revenue and the cost of goods sold, showcasing how efficiently a company is producing or sourcing its products.

Contribution Margin Ratio

The percentage of each sales dollar that remains after variable costs are subtracted, contributing to covering fixed costs and profit.