# Powers Company reported Net sales of \$1,240,000 and average Accounts Receivable, net of \$74,500. The accounts receivable turnover ratio is:

Accounts receivable turn over is 16.64

Explanation:

To compute accounts receivable turn over ratio, we simply divide net credit sales over the average accounts receivable.

Accounts receivable turn over ratio = \$1,240,000/\$74,500

= 16.64

The higher the ratio, the better it is in the company. It simply means, the company exercises the effective way to collect its receivable from the customer.

*Net credit sales is derived by deducting sales returns and allowances from gross credit sales. If the problem is silent regarding cash sales, we will assume that the sales made by the period is all at credit.

## Related Questions

The centralized computer technology department of Hardy Company has expenses of \$320,000. The department has provided a total of 4,000 hours of service for the period. The Retail Division has used 2,750 hours of computer technology service during the period, and the Commercial Division has used 1,250 hours of computer technology service. Use the following data: Retail Division Commercial Division Sales \$2,150,000 \$1,200,000 Cost of goods sold 1,300,000 800,000 Selling expenses 150,000 175,000 Required: Determine the divisional income from operations for the Retail Division and the Commercial Division. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.

Retail Division  = \$480,000

Commercial Division = \$125,000

Explanation:

Divisional income from operations for the Retail Division and the Commercial Division

Retail Division     Commercial Division

Sales                                               \$2,150,000              \$1,200,000

Cost of goods sold                        (\$1,300,000)             (\$800,000)

Controllable Contribution                \$850,000                 \$400,000

Less Expenses

Selling expenses                            (\$150,000)                 (\$175,000)

Allocated Central Costs                 (\$220,000)                (\$100,000)

Net Income before tax                    \$480,000                  \$125,000

Calculations :

Allocation of Central Costs :

Retail Division (2,750/ 4,000 ×  \$320,000) = \$220,000

Retail Division (1,250/ 4,000 ×  \$320,000) = \$100,000

Under the periodic inventory system: a. inventory records are updated immediately after each purchase.
b. inventory must be counted at the end of each accounting period.
c. inventory does not have to be counted. (It can be taken from the accounting records.)
d. inventory levels must be counted every day.

The correct answer is letter "B": inventory must be counted at the end of each accounting period.

Explanation:

The Periodic Inventory System is an approach of keeping track of the inflows and outflows of the inventory of a company after determined periods. Starting the year, companies using this inventory method count the number of items in their inventory which will vary during the course of a period and by the end of it another count is made to find out the difference between the starting and ending inventory. The calculation helps to find out the Cost of Goods Sold by the firm (COGS).

Amie was recently hired at Kreigmeister Industries as a repairperson. She was informed that if she chose not to join the union representing her fellow repair workers, she would still have to pay a fee to the union. Apparently, Kreigmeister operates under a(n):A. illegal arrangement, since nonmembers can never legally be required to pay fees to unions.B. closed shop agreement.C. union shop agreement.D. agency shop agreement.

The correct answer is letter "D": agency shop agreement.

Explanation:

Agency shop agreement is a union arrangement that allows employers to hire union and non-union workers without affecting the company's organization. In some cases, workers must join the union to keep the job, while in others, they could decide not to join the union but they must pay a fee to cover the expenses of collective bargaining.

Cooley Company's stock has a beta of 1.40, the risk-free rate is 25%, and the market risk premium is 5.50%. What is the firm's required rate of return

Explanation:

Given the variables available, the required rate of return can be computed using the Capital Asset Pricing Model with the formula;

Required Return = Risk-free rate + beta ( Market risk premium)

Required return = 4.25% + 1.4 * 5.5%

Required return = 4.25% + 7.7%

Required return = 12.2%

Note; The actual question says the Risk-free rate is 4.25%.

A manager wants to know the range of output in units per day for a given product given the individual task times. How does she calculate the range?

She should subtract the lowest unit of the product produced at a particular time of the day from the highest unit of the product produced at another time of the day

Explanation:

Range is calculated by subtracting the lowest output at a given time of the day from the highest output at another time of the day

Companies prepare direct labor budgets to ________. avoid labor shortages determine the direct labor-hours per unit ensure timely supply of raw materials reduce inventories

direct labor-hours per unit

Explanation:

A labor budget is prepared to determine the business` need for planned labor in the budget period.

It can be prepaid to show :

1. the number of labor hours required
2. the number of workers required
3. cost of hiring the required number of workers

All of this also applies for a unit production.