The Inventory Turnover for the Sneeky Company Is 8 Times

question 14

Multiple Choice

The inventory turnover for the Sneeky Company is 8 times and its days sales outstanding is 55. The average payables deferral period (or turnover) is 7.5. What is the cash cycle for Sneeky given a 365-day year.

• A) 149.29.
• B) 51.96.
• C) 58.04.
• D) 115.00.

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Definitions:

Total Manufacturing Costs

This encompasses all costs involved in the production of goods, combining direct materials, direct labor, and manufacturing overhead.

Manufacturing Overhead Costs

All indirect costs associated with the manufacturing process, including but not limited to utilities, maintenance, and salaries of non-direct labor.

Direct Labour Costs

Expenses associated with the wages of employees who are directly involved in the production of goods or services.

Nonmanufacturing Costs

Expenses not directly related to the production of goods, including sales, administration, and marketing costs.