The Inventory Turnover Ratio Measures the Average Number of Days

question 56

True/False

The inventory turnover ratio measures the average number of days that inventory is held by a company.

---

Definitions:

Direct Materials

Raw materials that can be directly traced to the manufacturing of a product and are considered a variable cost.

Direct Labor

The cost of wages paid to workers directly involved in the production of goods or provision of services.

Direct Materials

The raw materials directly traceable to the manufacturing of a product and included in the cost of goods sold.