Question

From the following calculate Net
Operating Cycle Period.
Raw material storage period
=40days; Work in process period
25 days; Finished Goods storage
period =20 days; Average
Collection period =25 days;
Average Payment Period = 25 days.
O 85 days
O 135 days
o 20 days
O 65 days​

Answer 1

Explanation:

Operating Cycle = Inventory Period + Accounts Receivable Period

Inventory Period is the amount of time inventory sits in storage until sold.

Accounts Receivable Period is the time it takes to collect cash from the sale of the inventory.