Days in Inventory Is Calculated by Dividing 365 Days by

question 25

Multiple Choice

Days in inventory is calculated by dividing 365 days by

• A)average inventory.
• B)beginning inventory.
• C)ending inventory.
• D)the inventory turnover ratio.

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Definitions:

Contribution Margin

The amount remaining from sales revenue after all variable expenses have been deducted, indicating the ability to cover fixed costs and generate profit.

Total Contribution Margin

The difference between total sales revenue and total variable costs, measuring how much revenue covers fixed costs and profits.

CVP Graph

A visual representation of the Cost-Volume-Profit analysis that illustrates the relationships between costs, volume, and profit.

Total Fixed Expenses

Total fixed expenses refer to the sum of all costs that do not change with the level of production or sales over a certain period.