Calculate the Cash Conversion and Operating Cycle, Given the Following

question 88

Multiple Choice

Calculate the Cash Conversion and Operating cycle, given the following information: $$\begin{array} { | l | c | } \hline \text { Data: } & \\\hline \text { Average Inventory } & 1,500.00 \\\hline \text { Average AR } & 2,500.00 \\\hline \text { Average AP } & 650.00 \\\hline \text { sales } & 12,000.00 \\\hline \text { COGB } & 9,500.00 \\\hline\end{array}$$

• A)107 days and 132 days
• B)109 days and 134 days
• C)111 days and 136 days
• D)113 days and 138 days

Recognize direct materials, direct labor, and manufacturing overhead as components of product costs.

Distinguish between selling and administrative expenses and manufacturing costs.

Identify direct costs and indirect costs with respect to a specific cost object.

Define and differentiate between prime costs and conversion costs.

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Definitions:

Consumer Type

Refers to the characteristics or categories of consumers distinguished by preferences, purchasing behavior, or demographic factors.

Demand Function

A mathematical model that describes the relationship between the quantity of a good or service consumers are willing to buy and factors such as its price, consumers' income, and prices of related goods.

Market Share

The portion of a market controlled by a particular company or product, represented as a percentage of total sales in the industry.

Perceived Market

The market as understood or interpreted by individuals or firms, potentially affecting their decisions or strategies.