Which of the following is the correct formula for calculating days' sales in raw materials inventory 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 inventory/Raw materials used × 365.
E)Raw materials used/Beginning raw materials inventory × 365.

Question

Quizplus · Accepted Answer

Days' sales in raw materials inventory is calculated by dividing the ending raw materials inventory by the raw materials used and then multiplying by 365 to convert it into days.

Which of the Following Is the Correct Formula for Calculating