Days' Sales in Inventory

question 36

Multiple Choice

Days' sales in inventory:

• A) Is also called days' stock on hand.
• B) Focuses on average inventory rather than ending inventory.
• C) Is used to measure solvency.
• D) Is calculated by dividing cost of goods sold by ending inventory.
• E) Is a substitute for the acid-test ratio.

---

Definitions:

Labor Costs

The total sum of all wages, benefits, and taxes that an employer incurs in compensation for the work performed by employees.

Strategic Decision Making

The process of making choices by identifying priorities, alternatives, and potential impacts, often under conditions of uncertainty, to achieve strategic goals.

Top Managers

Senior executives who are responsible for the overall direction and success of the entire organization.

Normative Decision Model

A framework that suggests leaders determine the appropriate amount of employee participation based on specific situational variables.