Regarding Markups and Turnover

question 219

Multiple Choice

Regarding markups and turnover:

• A) high markups usually lead to high profits.
• B) speeding turnover usually decreases profits.
• C) items sold at low markups (e.g., 20 percent) cannot be profitable.
• D) depending on the industry--a stockturn rate of 1 or 2 may be quite profitable.
• E) All of the above.

Recognize the structure and purpose of a cost of production report.

Learn the application of the FIFO and average costing methods in process costing.

Understand how indirect materials are treated in process costing.

Discover the importance of lean manufacturing in reducing unit costs.

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Definitions:

Remedies

Legal means for enforcing a right or redressing a wrong, including monetary damages and specific performance.

Parol Evidence Rule

A legal principle that prevents parties in a contract dispute from presenting evidence of prior or concurrent oral agreements that would contradict the written terms of the contract.

Rent

The payment made by a tenant to a landlord for the use of a property, room, or apartment for a designated period.

Profits

The financial gain derived from a business activity after deducting expenses.