Assuming production needs can be met,companies usually prefer:
A) A lower number of days' sales in raw materials inventory.
B) A higher number of days' sales in raw materials inventory.
C) That days' sales in inventory be higher than the days in the accounting period.
D) That days' sales in inventory be greater than the operating cycle
E) That days' sales in inventory be equal to the days in the accounting period

Question

Quizplus · Accepted Answer

Companies usually prefer a lower number of days' sales in raw materials inventory as it reduces the amount of capital tied up in inventory and allows for a more efficient production process. This means that the raw materials are used up quickly, and production can continue without interruption due to a shortage of materials. However, it is important to balance this with the risk of stockouts or delays in raw material delivery.

Assuming Production Needs Can Be Met,companies Usually Prefer