Cooper Copper,a manufacturer of copper piping,buys copper on credit on March 10.It processes this copper to make pipes on March 25 and pays cash for the copper on April 9.On April 14 it sells the pipes to a construction company,and on May 14 receives cash payment for this sale.What is the length of the operating cycle in this case?

Question

Quizplus · Accepted Answer

The operating cycle is the time it takes for a company to purchase inventory, sell the inventory, and collect cash from the sale. 
In this case, the operating cycle is:
- March 10 to March 25: 15 days to process copper into pipes
- March 25 to April 9: 15 days to pay for the copper
- April 14 to May 14: 30 days to sell the pipes and collect cash
Total operating cycle: 15 + 15 + 30 = 60 days. 
Therefore, the best choice is C, which is the closest option to 60 days.

Cooper Copper,a Manufacturer of Copper Piping,buys Copper on Credit on March