Verbeke Incorporated reported the following results from last year's operations: Last year's turnover was closest to:
A) 16.67
B) 0.06
C) 2.10
D) 0.48

Question

Verbeke Incorporated reported the following results from last year's operations:  Last year's turnover was closest to:
A) 16.67 
B) 0.06 
C) 2.10 
D) 0.48

Quizplus · Accepted Answer

Turnover is calculated by dividing the cost of goods sold by the average inventory. From the statement, we can calculate:

Turnover = Cost of Goods Sold / Average Inventory 
Turnover = (407,500 + 387,500) / [(70,000 + 60,000) / 2] 
Turnover = 795,000 / 65,000 
Turnover = 12.23

The closest answer choice to 12.23 is C) 2.10.

Verbeke Incorporated Reported the Following Results from Last Year's Operations