Waters Department Store Had Net Credit Sales of €16,000,000 and Cost

question 71

Multiple Choice

Waters Department Store had net credit sales of €16,000,000 and cost of goods sold of €10,000,000 for the year. The average inventory for the year amounted to €2,000,000. The average number of days in inventory during the year was

• A) 91 days.
• B) 73 days.
• C) 46 days.
• D) 37 days.

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Definitions:

Mixed Cost

A cost that contains both fixed and variable components, changing with the level of activity but not in direct proportion.

Variable Cost

Variable cost refers to expenses that change directly with the level of production or business activity, such as raw materials and labor costs.

Fixed Cost

Expenses that do not change with the level of production or sales activity, such as rent or salaries.

Work in Process-Department X

Inventory representing partially completed goods that are still in the production process within a specific department.