Which of the following metrics compares the cost of goods sold (COGS) for a period to the average inventory cost for a period?

Question

Quizplus · Accepted Answer

Inventory turnover ratio measures the number of times a company sells and replaces its inventory over a period. It compares the cost of goods sold (COGS) for a period to the average inventory cost for a period. This ratio indicates how quickly a company is turning over its inventory in order to generate sales. Therefore, the correct answer is B. Total cost per unit is not relevant in this context. Actual versus budget cost and carrying costs are different metrics that measure cost management and inventory management, respectively.

Which of the Following Metrics Compares the Cost of Goods