Homework Sourse1 1 Baldwin has asset turnover of 14 Turnover SalesTotal As
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
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?
| For every $1.40 of profit the company has an investment of $1.00 in assets |
Solution
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
