Cost and Management AccountingQuestion 5470 of 251
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9. Calculate average number of days (round off) for which average inventory level to be held. COST AND MANAGEMENT ACCOUNTING

Options

A27 days
B29 days
C26 days
D30 days
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Correct Answer

✅ Option A — 27 days

All Options:

  • A27 days ✓
  • B29 days
  • C26 days
  • D30 days

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Detailed Solution & Explanation

The average inventory holding period in days is calculated as follows:
Average Inventory Holding Period=Average InventoryAnnual Consumption×365 days\text{Average Inventory Holding Period} = \frac{\text{Average Inventory}}{\text{Annual Consumption}} \times 365 \text{ days}
Applying the case study parameters, the average number of days is 27 days.
Hence, **Option A** is the correct answer.

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