The Purpose of a Work-In-Process Inventory Is To

question 68

Multiple Choice

The purpose of a work-in-process inventory is to:

• A) provide the materials needed to make the product.
• B) enable overall production to be divided into stages of manageable size.
• C) reduces the organization's investment in storage space.
• D) provide ready supply of products on customer demand and enable long, efficient production runs.
• E) distribute products to customers.

---

Definitions:

Accounts Payable

Liabilities representing amounts a company owes to creditors for goods and services purchased on credit and not yet paid.

Average Days

A measure that typically refers to the average number of days an asset is held or the average number of days it takes for a company to convert certain assets into cash.

Sell Inventory

The process of selling goods that are held for sale in the ordinary course of business, turning inventory into revenue.

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a period, indicating the efficiency of inventory management.