Use the Following to Calculate the Inventory Turnover Ratio for the Year

question 85

Essay

Use the following to calculate the inventory turnover ratio for the year 2019.
$$\begin{array} { l l l } & \underline { 2019 } & \underline { 2018 } \\\text { Cost of Goods Sold } & 585,000 & 475,000 \\\text { Merchandise Inventory } & 320,000 & 295,000\end{array}$$

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Definitions:

Materials Handling

The moving, protection, storage, and control of materials and products throughout manufacturing, warehousing, distribution, consumption, and disposal.

Direct Labor-Hours

The total number of hours worked by employees who are directly involved in the production process, typically used as a base for applying manufacturing overhead costs.

Overhead Cost

Indirect costs of a business that are not directly tied to a specific product or service, such as rent, utilities, and administrative expenses.

Activity-Based Costing

A costing method that assigns costs to products or services based on the activities they require, aiming for more precise cost allocation.