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Fosnight Enterprises prepared the following sales budget: The Pasta Division of Whole Grain Corporation had sales of $7,000,000 and operating income of $1,190,000 last year.

Fosnight Enterprises prepared the following sales budget:

The Pasta Division of Whole Grain Corporation had sales of $7,000,000 and operating income of $1,190,000 last year. The total assets of the Pasta Division were $2,000,000, while current liabilities were $300,000. Whole Grain Corporation's target rate of return is 13%, while its weighted average cost of capital is 8%. The effective tax rate for the company is 40%. What is the Pasta Division's capital turnover?

23.3

5.9

6.7

3.5

The expected gross profit rate is 20% and the inventory at the end of February was $12,000. Desired inventory levels at the end of the month are 10% of the next month's cost of goods sold. What are the total purchases budgeted for April?

$11,840

$1200

$12,160

$13,200

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