CA Inter P6 · Chapter 9 · Question 2 of 9
Average raw material inventory is ₹ 3,00,000 and annual raw material consumption is ₹ 24,00,000. Assuming 360 days in a year, the raw material storage period is:
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Reveal answer & explanation
Correct answer: D) 45 days
Explanation
Raw material storage period = average raw material stock / (annual consumption / 360) = 3,00,000 / (24,00,000 / 360) = 3,00,000 / 6,666.67 = 45 days. The figure 8 is the number of times inventory turns over (24,00,000 / 3,00,000), not days.
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