EKPN Company recorded the following operating data: $$\begin{array} { l l }
\text { Sales } & \$ 1,250,000 \
\text { Contribution margin } & 485,000 \
\text { Total direct fixed costs } & 400,300 \
\text { Total operating assets Jan. 1, 2020 } & 750,000 \
\text { Total operating assets Dec. 31, 2020 } & 790,000 \
\text { EKPN Compary's desired return } & 12 \%
\end{array}$$ What is EKPN Company's average operating assets for 2020?
A)$770,000
B)$750,000
C)$790,000
D)$150,000

Question

EKPN Company recorded the following operating data: $$\begin{array} { l l } 
\text { Sales } & \$ 1,250,000 \
\text { Contribution margin } & 485,000 \
\text { Total direct fixed costs } & 400,300 \
\text { Total operating assets Jan. 1, 2020 } & 750,000 \
\text { Total operating assets Dec. 31, 2020 } & 790,000 \
\text { EKPN Compary's desired return } & 12 \%
\end{array}$$ What is EKPN Company's average operating assets for 2020?
A)$770,000
B)$750,000
C)$790,000
D)$150,000

Quizplus · Accepted Answer

The average operating assets for 2020 is calculated by taking the sum of the total operating assets at the beginning of the year (January 1, 2020) and at the end of the year (December 31, 2020), and then dividing by 2. This is $(750,000 + 790,000) / 2 = 1,540,000 / 2 = 770,000$.

EKPN Company Recorded the Following Operating Data What Is EKPN Company's Average Operating Assets for 2020? A)$770,000

EKPN Company Recorded the Following Operating Data What Is EKPN Company's Average Operating Assets for 2020?
A)$770,000