Calculate Average Inventory If Sales Is $400,000 and the Inventory

question 125

Multiple Choice

Calculate average inventory if sales is $400,000 and the inventory turnover is 1.6.

• A) $280,000
• B) $250,000
• C) $150,000
• D) $180,000
• E) $140,000

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Definitions:

Benchmarks

Benchmarks are standard points of reference against which performance, quality, or value can be measured, often used for comparison in business, finance, and industry.

Top-Down Budgeting

A budgeting approach where the budget is created by the top management and then distributed down through the ranks of the organization.

Sales Forecasts

Predictions of the future sales performance of a company, typically based on historical data, market trends, and economic conditions.

Participative Budgeting

A budgeting process where employees at all levels are involved in the development of the budget, enhancing its acceptance and usefulness.