Inmoo Company's Average Age of Accounts Receivable Is 45 Days,the

question 95

Multiple Choice

Inmoo Company's average age of accounts receivable is 45 days,the average age of accounts payable is 40 days,and the average age of inventory is 69 days.Assuming a 365-day year,what is the length of its cash conversion cycle?

• A)63 days
• B)67 days
• C)70 days
• D)74 days
• E)78 days

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Definitions:

Fixed Manufacturing Overhead

Fixed manufacturing overhead consists of expenses that do not change with the level of production, such as rent, depreciation, and salaries of permanent staff.

Special Order

A one-time order that is not part of the company's usual ongoing operations, often requiring a deviation from standard pricing and production procedures.

Future Costs

Future costs are expected or estimated costs that will be incurred in the performance of future activities or business operations, guiding budgeting and planning processes.

Sunk Cost

Costs that have already been incurred and cannot be recovered.