MANAGEMENT

Detailed explanation-1: -In accounting, the inventory turnover is a measure of the number of times inventory is sold or used in a time period such as a year. It is calculated to see if a business has an excessive inventory in comparison to its sales level.

Detailed explanation-2: -Inventory turnover is the rate that inventory stock is sold, or used, and replaced. The inventory turnover ratio is calculated by dividing the cost of goods by average inventory for the same period. A higher ratio tends to point to strong sales and a lower one to weak sales.

Detailed explanation-3: -Inventory usage is how much inventory a business has used over a specific time frame. It’s similar to COGS, but it speaks to the number of units sold and not their monetary value. It’s also called inventory consumption.

Detailed explanation-4: -Inventory usage is calculated with a fairly straightforward formula: Opening inventory + purchases received-closing inventory = inventory usage.

Detailed explanation-5: -Consuming inventory on the work order indicates that the item has been used to complete the work order and also adjusts the on hand amount.