Clark Corporation Has an Average Collection Period of 7 Days,an

question 48

Multiple Choice

Clark Corporation has an average collection period of 7 days,an inventory conversion period of 30 days,and a payables deferrable period of 60 days.What is Clark's cash conversion cycle?

• A)97 days
• B)37 days
• C)23 days
• D)-23 days

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Definitions:

Variable Costing

A costing method that includes only variable production costs in product costs, treating fixed costs as period expenses.

Absorption Costing

An accounting method that includes all manufacturing costs, both fixed and variable, in the cost of a product.

Unit Sales

The total number of individual items or units sold by a company in a specific period.

Absorption Costing

A financial recording approach that encompasses all production expenses, including direct materials, direct labor, and overhead costs, both variable and fixed, in the pricing of a product.