Which of the Following Is Used to Determine the Rate

question 78

Multiple Choice

Which of the following is used to determine the rate of inventory turnover?

• A)Cost of sales divided by Average inventory
• B)Cost of sales times Gross profit
• C)Cost of sales times Average inventory
• D)Cost of sales divided by Gross profit

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Definitions:

Equivalent Unit

A concept used in cost accounting to represent the portion of a product, in terms of material, labor, or overhead costs, completed within a given period, facilitating cost analysis.

Assembly Department

A division within a manufacturing facility where components are assembled into final products or where significant assembly activity takes place.

First-In, First-Out Method

An inventory valuation method where the goods first produced or acquired are sold or used before newer inventory.

Equivalent Units

A method used in process costing to convert partially completed goods into a comparable number of fully completed units.