Chapter 1, Problem 15QS

To determine

Raw Materials:

The materials which are yet to go through the production process so to reshape into end products are the raw materials. They form a part of the inventory and are recorded as current asset in the balance sheet.

Raw Material Inventory Turnover:

It depicts the fraction of raw materials taken up by the company for the production process within an accounting period. It states a ratio which shows the number of times materials were employed during an accounting period which thereby states the productivity or the efficiency level of the company.

Days’ Sales in Raw Material Inventory:

It indicates the days taken up by the company to utilize the raw materials for the production.

Raw materials inventory turnover and the number of days’ sales in raw materials.