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A Firm Has a Cash Conversion Cycle of 80 Days

question 56

Multiple Choice

A firm has a cash conversion cycle of 80 days, an average collection period of 25 days, and an average age of inventory of 70 days. Its operating cycle is ___________ days.


Definitions:

Predetermined Overhead Rate

A rate calculated at the beginning of a period, used to allocate overhead costs to products based on a particular activity base, such as machine-hours or labor-hours.

Machine-Hours

The total number of hours that machinery is in operation, often used as a measure for allocating manufacturing overhead costs.

Machine-Hours

A measure of production time based on the number of hours machines are operating.

Unused Capacity

Available production or service facilities that are currently not in use or are underutilized.

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