The Inventory Turnover Ratio Is Calculated As

question 192

Multiple Choice

The inventory turnover ratio is calculated as:

• A) Cost of goods sold divided by average merchandise inventory.
• B) Sales divided by cost of goods sold.
• C) Ending inventory divided by cost of goods sold.
• D) Cost of goods sold divided by ending inventory.
• E) Cost of goods sold divided by ending inventory times 365.

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Definitions:

Activity-based Costing

A cost allocation technique that assigns overhead and indirect costs to relevant products and services based on the activities they demand.

Machining

The process of shaping, cutting, or altering a material using machines or tools, often used in the manufacturing of parts or components.

Activity-based Costing

Activity-based costing (ABC) is a method of assigning overhead and indirect costs to specific products or activities based on their usage.

Machining

The process of cutting, shaping, or removing material from a workpiece using machines or tools, often for manufacturing purposes.