Efficiency Ratio: Gateway Company Has an Inventory Turnover Ratio of 5.6

question 16

Multiple Choice

Efficiency ratio: Gateway Company has an inventory turnover ratio of 5.6. What is the company's days' sales in inventory?

• A) 65.2 days
• B) 64.3 days
• C) 61.7 days
• D) 57.9 days

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Definitions:

Total Weight

The combined mass of all the components or elements of an item or shipment, often measured in pounds or kilograms.

Direct Labor Dollars

The total cost of wages paid to employees who are directly involved in the manufacturing process.

Absorption Cost

A comprehensive approach to product costing that includes all types of manufacturing costs: direct materials, direct labor, and both fixed and variable manufacturing overhead.