The Cash Conversion Cycle Is the Sum of the Inventory

question 17

True/False

The cash conversion cycle is the sum of the inventory conversion period, the receivables collection period, and the payables deferral period.

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Definitions:

Volume Variance

The difference between the budgeted fixed overhead and the applied fixed overhead, which is usually driven by a difference in actual production volume and the expected production volume.

Materials Price Variance

The variance between the real expense of materials and their anticipated (standard) price.

Raw Material

The basic substances or components that are processed or used in the manufacturing of goods.

Direct Labor-Hours

The cumulative number of labor hours directly engaged in manufacturing goods or services.