A. 1.2 times
B. 1.5 times
C. 2.0 times
D. 7.5 times
Correct Answer: Option A
A. 1.2 times
Explanation
To calculate the rate of turnover, the following things are needed;
- opening stock
- closing stock
- cost of goods sold.
All this have been given in the question so we go ahead to calculate our rate of turnover.
first step is calculating the average stock which is gotten as; opening stock + closing stock / 2
Thus we have; Average stock = 40,000 + 48,000= 88,000 / 2= 44,000
rate of turnover= cost of goods sold / average stock.
24,000 / 44,000= 1.2 times
