Days Sales in Inventory Is Calculated by

question 101

Multiple Choice

Days sales in inventory is calculated by

• A) cost of goods sold divided by average inventory.
• B) average inventory divided by cost of goods sold.
• C) days in the year divided by inventory turnover ratio.
• D) inventory turnover ratio divided by days in the year.

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Definitions:

Manufacturing Costs

Manufacturing costs include all expenses directly involved in the production of goods, such as raw materials, labor, and overhead costs.

Subsequent Period

A time frame that follows the current or initial period, often used in accounting and financial reporting.

Accumulating

The process of gathering or increasing quantities over time, whether it relates to interest, investments, or other assets.

Assigning Manufacturing Costs

The process of allocating direct and indirect costs to the production of goods.