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What Is the Purpose of the Days' Sales Uncollected Ratio

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What is the purpose of the days' sales uncollected ratio?


Definitions:

Indirect Materials

Materials used in the production process but cannot be directly traced to the final product; often considered part of manufacturing overhead.

Indirect Labor

Labor costs associated with employees who do not directly contribute to the production of goods or services but support the production process, such as maintenance staff or supervisors.

Direct Materials

Raw materials that can be directly attributed to the production of a good or service.

Direct Labor

Refers to the wages and other costs for labor directly involved in the production of goods or services.

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