If It Takes 45 Days to Sell Inventory,30 Days to Collect

question 4

True/False

If it takes 45 days to sell inventory,30 days to collect for the sale,and creditors' payment terms are 60 days,the financing period is 135 days.

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Definitions:

Variable Overhead Costs

Expenses that fluctuate with production volume, such as utilities or raw materials, which are not directly linked to a specific unit of production.

Number of Guests

Refers to the count of individuals attending an event or accommodated by a service, such as in a hotel or restaurant.

Activity Variance

The difference between the planned activity and the actual activity level, which can affect budgeting and operations.

Revenue

The total amount of money generated by a company through its activities, often from sales of products or services.