The Inventory Turnover Ratio Is Calculated by Dividing the Cost

question 132

Multiple Choice

The inventory turnover ratio is calculated by dividing the cost of goods sold by

• A) beginning inventory.
• B) ending inventory.
• C) average inventory.
• D) number of days in the year.

---

Definitions:

Customizing Department

A specialized division within a company dedicated to tailoring products or services to individual customer specifications or preferences.

Job-Order Costing System

A costing system that accumulates costs individually for each job.

Direct Labor-Hours

The cumulative hours put in by workers directly engaged in the process of manufacturing or in delivering services.

Predetermined Overhead Rate

The rate at which overhead costs are applied to products or services, estimated before the costs are incurred.