The Baily Division recorded operating data as follows for the past two years:

Baily Division's turnover was exactly the same in both Year 1 and Year 2.
-What were the sales in Year 1?
A) $400,000.
B) $750,000.
C) $900,000.
D) $1,200,000.

Question

The Baily Division recorded operating data as follows for the past two years:

Baily Division's turnover was exactly the same in both Year 1 and Year 2.
-What were the sales in Year 1?
A) $400,000. 
B) $750,000. 
C) $900,000. 
D) $1,200,000.

Quizplus · Accepted Answer

Since the turnover (sales) was exactly the same in Year 1 and Year 2, we can assume that the total operating expenses and operating profit remained the same as well. Therefore, we can use the formula:

Turnover = Operating expenses + Operating profit

Plugging in the values for Year 2, we get:

$1,800,000 = $1,200,000 + Operating profit

Operating profit = $600,000

Now we can use the formula again to solve for Year 1:

Turnover = Operating expenses + Operating profit

Plugging in the values for Year 1 and the operating profit we just calculated, we get:

Turnover = $300,000 + $600,000 = $900,000

Therefore, the sales in Year 1 were $900,000.

The Baily Division Recorded Operating Data as Follows for the Past