Which one of the following analytical procedures may indicate possible inventory obsolescence problems when ratios are large?
A) inventory turnover
B) finished goods produced to raw material used
C) inventory growth to cost of sales growth
D) finished goods produced to direct labor
E) product defects per million

Question

Quizplus · Accepted Answer

A large inventory growth to cost of sales growth ratio may indicate that inventory is growing faster than sales, suggesting potential obsolescence issues.

Which One of the Following Analytical Procedures May Indicate Possible