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2 years ago

The fixed asset turnover ratio is computed as divided by .

Business

1 answer:

Yuri [45]2 years ago

3 0

The correct option is (a) sales; average book value of fixed assets.

The fixed asset turnover ratio is computed as sales divided by average book value of fixed assets.

The fixed asset turnover ratio demonstrates the effectiveness of a company's current fixed assets in driving sales. A greater ratio suggests that management is making better use of its fixed assets. No information can be gleaned from a high FAT ratio about a company's capacity to produce reliable earnings or cash flows.

The ratio of sales to the value of fixed assets is known as fixed-asset turnover. It shows how effectively the company is generating sales by utilizing its fixed assets.

A greater ratio is typically preferred since it suggests that the business is effective at producing sales or revenues from its asset base. A lower ratio suggests that a business is not utilizing its resources effectively and may be experiencing internal issues.

Learn more about fixed asset turnover ratio

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3 years ago

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Answer:

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3 years ago

Aaron Company uses the periodic inventory cost flow method. If Aaron's ending inventory is understated due to an accounting erro

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Answer:

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3 years ago

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3 years ago

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Agassi Company uses a job order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to

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Answer:

See solution below

Explanation:

• Predetermined overhead rate for Department D

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= 0.8 × 100

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3 years ago

The fixed asset turnover ratio is computed as __________ divided by __________.

The fixed asset turnover ratio is computed as divided by .