Sandy Shores, Inc From 2016 to 2017, the Company's Management of Inventory Is

question 56

Multiple Choice

Sandy Shores, Inc.reported the following amounts in its financial statements: $\begin{array}{lrr} & \underline{2017} & \underline{2016} \\\text { Average merchandise inventory } & \$ 200,000 & \$ 120,000 \\\text { Cost of goods sold } & 4,000,000 & 3,000,000\end{array}$ From 2016 to 2017, the company's management of inventory is

• A) declining, because the number of days' sales in inventory is getting larger.
• B) increasing, because the number of days' sales in inventory is getting larger.
• C) declining, because the number of days' sales in inventory is getting smaller.
• D) increasing, because the number of days' sales in inventory is getting smaller.

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Definitions:

Price Taker

A price taker is a firm or individual who has no power to influence the prices in a market, taking the prevailing prices as given.

Short-Run Supply Curve

A graphical representation showing the quantity of goods a firm is willing to produce and sell at different price levels in the short term.

Marginal Cost

The expenditure required to produce one more unit of a product or service.

Average Variable Cost

The variable cost per unit of output, calculated by dividing total variable costs by the quantity of output produced.