Company X has net sales revenue of $1,250,000,cost of goods sold of $760,000,and all other expenses of $290,000.The beginning balance of shareholders' equity is $400,000 and the beginning balance of fixed assets is $361,000.The ending balance of shareholders' equity is $600,000 and the ending balance of fixed assets is $389,000.What is the fixed asset turnover ratio?
A)0.53
B)2.50
C)3.33
D)0.80

Question

Quizplus · Accepted Answer

The fixed asset turnover ratio is calculated as net sales revenue divided by the average fixed assets. Average fixed assets = ($361,000 + $389,000) / 2 = $375,000. Fixed asset turnover ratio = $1,250,000 / $375,000 = 3.33.

Company X Has Net Sales Revenue of $1,250,000,cost of Goods