Based on the Following Data for the Current Year, What

question 183

Multiple Choice

Based on the following data for the current year, what is the inventory turnover
$\begin{array}{lr}\text { Sales on account during year } & \$ 700,000 \\\text { Cost of goods sold during year } & 270,000 \\\text { Accounts receivable, beginning of year } & 45,000 \\\text { Accounts receivable, end of year } & 35,000 \\\text { Inventory, beginning of year } & 90,000 \\\text { Inventory, end of year } & 110,000\end{array}$

• A) 2.7
• B) 9.7
• C) 2.5
• D) 3.0

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Definitions:

Direct Materials

Raw materials that can be directly traced to the manufacturing process of a product and are an integral part of the finished good.

Direct Labor

The cost of workers who can be easily identified with the manufacturing process of a product.

Control

The process of gathering feedback to ensure that a plan is being properly executed or modified as circumstances change.

Budgets

Formal quantitative plans for the financial management of resources over a specified period, often used for controlling and directing resources.