Test Index

WAEC Commerce 2017 Paper

Question : 12

Total: 49

Solution:

Concept:

Stock turnover rate measures how many times average stock is sold during a period.

Explanation:

First, calculate average stock using:

\text{Average stock} = \frac{\text{Opening stock} + \text{Closing stock}}{2}

Substitute the given values:

\text{Average stock} = \frac{40,000 + 24,000}{2} = \frac{64,000}{2} = 32,000

Then apply the rate of turnover formula:

\text{Rate of turnover} = \frac{\text{Cost of goods sold}}{\text{Average stock}}

Now substitute the figures:

\text{Rate of turnover} = \frac{48,000}{32,000} = 1.5 \text{ times}

Answer:

The rate of turnover is

1.5

times.

Correct option: B. 1.5 times.

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