Question

Buckeye Incorporated has operating income of $ 434,000​, a sales margin of 7​%, and a capital turnover rate of 2. What amount would Buckeye report for​ sale

Answer 1

Answer:

The amount Buckeye would report for​ sale is $6,200,000.

Explanation:

Sale refers to income or revenue that a company got by selling its goods or providing its services.

In accounting ratio analysis, sales margin is obtained by dividing the operating profit by sale. Therefore, the formula for sales margin can be written as follows:

Sales margin = Operating income / Sale ................... (1)

To obtain Sale, we can substitute the figures for sales margin and operating profit from the question into equation (1) and then solve for sale as follows:

7% = $434,000​ / Sale

Sale * 7% = $434,000

Sale = $434,000 / 7%

Sale = $6,200,000

Therefore, the amount Buckeye would report for​ sale is $6,200,000.