Question
During 2019, Cute Toys sold 500,000 units for $8 each. It offered sales discounts worth $100,000; as well, sales returns and allowances amounted to $300,000.
During 2019, Cute Toys sold 500,000 units for $8 each. It offered sales discounts worth $100,000; as well, sales returns and allowances amounted to $300,000. The company reported a total of $710,000 in fixed assets on January 1, 2019, and $890,000 in fixed assets on December 31, 2019.
1) calculate net sales revenue.
2) calculate average fixed assets.
3) calculate the fixed asset turnover ratio.
4) assume the 2019 fixed asset turnover ratio was lower than the 2018 ratio. Describe one circumstance where this change would indicate bad news and one circumstance where this change would be consistent with good news.
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