You Can Calculate Inventory Turnover Dividing Cost of Goods Sold

question 150

Multiple Choice

You can calculate inventory turnover dividing cost of goods sold by _____.

• A)inventory
• B)employee theft
• C)gross profit
• D)volume

Calculate and interpret IRR (Internal Rate of Return) for different investments.

Apply payback period analysis in project evaluation.

Understand the impact of budget constraints on project selection under capital rationing.

Evaluate projects using the profitability index method.

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Definitions:

Direct Materials

Direct materials are raw materials that are directly traceable to the manufacturing of a product and are a component of the total manufacturing cost.

Fixed Overhead Rate

A predetermined rate used to allocate fixed overhead costs to cost objects, calculated at the beginning of a period based on estimated costs and activity levels.

Fixed Factory Overhead Volume Variance

The difference between the budgeted and actual fixed overhead costs attributed to variations in production volume.

Gross Profit

The financial difference between revenue and the cost of goods sold before other expenses are deducted.