The correct answer is: A. inventory consumed
Inventory turnover ratio is a measure of how efficiently a company manages its inventory. It is calculated by dividing the cost of goods sold during the period by the average inventory held during the period. A higher inventory turnover ratio indicates that a company is selling its inventory more quickly, which can be a sign of good management. A lower inventory turnover ratio indicates that a company is holding onto its inventory for too long, which can be a sign of poor management.
The cost of inventory consumed is the cost of the goods that were sold during the period. This is the most relevant cost to use in the inventory turnover ratio because it reflects the actual cost of the goods that were sold. The cost of minimum inventory and the cost of maximum inventory are not relevant because they do not reflect the actual cost of the goods that were sold.
Here is a more detailed explanation of each option:
- Option A: Inventory consumed. This is the cost of the goods that were sold during the period. It is the most relevant cost to use in the inventory turnover ratio because it reflects the actual cost of the goods that were sold.
- Option B: Minimum inventory. This is the lowest level of inventory that a company holds at any given time. It is not relevant to use in the inventory turnover ratio because it does not reflect the actual cost of the goods that were sold.
- Option C: Maximum inventory. This is the highest level of inventory that a company holds at any given time. It is not relevant to use in the inventory turnover ratio because it does not reflect the actual cost of the goods that were sold.
- Option D: None of these. This is the correct answer because the cost of inventory consumed is the most relevant cost to use in the inventory turnover ratio.