Other Things Remaining the Same, If the Cost of Goods

question 22

Multiple Choice

Other things remaining the same, if the cost of goods sold decreases, then

• A)Inventory turnover ratio and weeks of supply will both go up.
• B)Inventory turnover ratio will go down, but the weeks of supply will go up.
• C)Inventory turnover ratio and weeks of supply will both go down.
• D)Inventory turnover ratio will go up, but weeks of supply will go down.
• E)Inventory turnover ratio will stay the same, but weeks of supply will go down.

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Definitions:

Price To Charge

Price to Charge refers to the amount a business decides to set for its product or service, taking into account costs, competitive prices, and profit margins.

Marginal Costs

The additional cost incurred by producing one additional unit of a product or service.

Variable Costs

Costs that vary directly with the level of production, such as materials and labor, in contrast to fixed costs which remain constant regardless of production level.

Homogeneous Products

Goods that are identical in quality and features, making them interchangeable in the eyes of consumers.