If a Company Was Interested in Calculating How Long It

question 3

Multiple Choice

If a company was interested in calculating how long it takes to receive payment from customers,which of the calculations would they make?

• A) Trade receivables/sales revenue x 365
• B) Sales revenue/trade receivables x 365
• C) Trade payables/cost of sales x 365
• D) Cost of sales/trade payables x 365

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Definitions:

Direct Labor

The labor costs of workers who are directly involved in manufacturing a product or providing a service.

Overhead Costs

Overhead costs refer to ongoing expenses related to the operation of a business that are not directly tied to the production of goods or services, such as rent, utilities, and administrative salaries.

Work in Process

Partially finished goods that are still in the production process at the end of an accounting period.

Inadequately Trained Employees

Workers who lack the necessary skills, knowledge, or experience required to perform their job tasks efficiently and effectively.