Which of the following is the correct formula for calculating raw materials inventory turnover for a manufacturer?
A)Raw materials purchased/Average raw materials inventory.
B)Average raw materials inventory/Raw materials used.
C)Raw materials used/Average raw materials inventory.
D)Ending raw materials/Raw materials used × 365.
E)Raw materials used/Beginning raw materials inventory × 365.

Question

Quizplus · Accepted Answer

Raw materials inventory turnover is calculated by dividing the cost of raw materials used during a period by the average inventory of raw materials during the same period. Therefore, option C (Raw materials used/Average raw materials inventory) is the correct formula to calculate raw materials inventory turnover for a manufacturer.

Which of the Following Is the Correct Formula for Calculating