The Formula for Inventory Turnover Is

question 89

Multiple Choice

The formula for inventory turnover is:

• A) Cost of goods sold ¸ average inventory
• B) Cost of goods manufactured ¸ average inventory
• C) Cost of goods sold ¸ cost of goods manufactured
• D) Average inventory × cost per unit

---

Definitions:

Year 2

Often refers to the second year of operation, study, or analysis in various contexts, particularly in financial and academic settings.

Absorption Costing

A technique in financial accounting that involves accumulating all costs of production, namely direct materials, direct labor, and overhead (both fixed and variable), into the cost base of a product.

Net Operating Income

This is the total profit of a company after operating expenses are subtracted from operating revenues but before income from investments and taxes are considered.

Operating Loss

The loss incurred when a company's operating expenses exceed its revenues, indicating that its core business operations are not profitable.