| opening stock | D6,000 |
| purchases | D23,000 |
| salaries and wages | D12,000 |
| closing stock | D8,000 |
| sales | D30,000 |
Use the information above to answer the following question.
what is the rate of turnover by BYX Enterprise
- 5.0 times
- 3.5 times
-
3.0 times
- 1.5 times
The correct answer is: C
Explanation
Rate of Turnover = opening stock + cost of goods sold / closing stock
(first, we determine the value for cost of goods sold since it isnt given in the table)
(cost of goods sold is gotten as = opening stock + purchases - closing stock)
(COGS= 6000 + 23000 - 8000 = 21000) ''since we now know the value of cost of sales, we can now calculate the rate of turnover''
rate of turnover = 6,000 + 21,000 / 8,000
27,000 / 8,000 = 3.0 times