In the Direct Materials Budget the Quantity of Direct Materials

question 79

Multiple Choice

In the direct materials budget the quantity of direct materials to be purchased is computed by adding direct materials required for production to

• A) desired ending direct materials.
• B) beginning direct materials.
• C) desired ending direct materials less beginning direct materials.
• D) beginning direct materials less desired ending direct materials.

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Definitions:

Total Asset Turnover

A financial ratio that measures a company's ability to generate sales from its assets by comparing sales to total assets.

Average Sale Period

The time it takes to convert your inventory into sales, usually expressed in days.

Average Sale Period

The average sale period is the average time taken to convert inventory into sales, often used to assess the efficiency of a business's inventory management.

Average Collection Period

The average time it takes for a company to receive payments owed by its customers, indicating the effectiveness of its credit and collection policies.