Question

1.

1. Baldwin has asset turnover of 1.4% (Turnover = Sales/Total Assets) This means:

For every $1.40 of profit the company has an investment of $1.00 in assets

There are of $8 for every dollar of profit

There are sales of $1.40 for every dollar of profit.

The company is generating $1.40 for every $1.00 of assets

2. Chester Corporation uses the accrual method of accounting. When it sells its first unit of inventory for its product Coat during the year, it also matched which of these expenses with that sale?

the R&D costs on the product Coat

the depreciation on the Coat product line

the promotion budget for the product Coat

the labor and material costs of the Coat product

Answer 1

1. Baldwin has asset turnover of 1.4% (Turnover = Sales/Total Assets) This means:
The company is generating $1.40 for every $1.00 of assets

Note: The total asset turnover ratio calculates net sales as a percentage of assets to show how many sales are generated from each dollar of company assets.

2. Chester Corporation uses the accrual method of accounting. When it sells its first unit of inventory for its product Coat during the year, it also matched which of these expenses with that sale:
  the labor and material costs of the Coat product