Interpretation of the inventory holding period depends on the industry in which a business operates. An increase in inventory days might be explained by which of the following? a) Seasonal variations in demand leading to a dramatic increase in the volume of sales of finished goods b) Supply problems arising from difficulties in purchasing raw materials from suppliers c) A new policy to reduce the level of inventory to reduce the associated costs of storage and insurance d) A business deliberately building up inventories prior to a large order
Interpretation of the inventory holding period depends on the industry in which a business operates. An increase in inventory days might be explained by which of the following? a) Seasonal variations in demand leading to a dramatic increase in the volume of sales of finished goods b) Supply problems arising from difficulties in purchasing raw materials from suppliers c) A new policy to reduce the level of inventory to reduce the associated costs of storage and insurance d) A business deliberately building up inventories prior to a large order
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter6: Cost Of Goods Sold And Inventory
Section: Chapter Questions
Problem 36BE: Effects of Inventory Costing Methods Refer to the information for Tyler Company above. Required: 1....
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Interpretation of the inventory holding period depends on the industry in which a business operates. An increase in inventory days might be explained by which of the following?
-
a) Seasonal variations in demand leading to a dramatic increase in the volume of sales of finished goods
-
b) Supply problems arising from difficulties in purchasing raw materials from suppliers
-
c) A new policy to reduce the level of inventory to reduce the associated costs of storage
and insurance
-
d) A business deliberately building up inventories prior to a large order
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