1. A company reported the following data: Required:1. Calculate the company's merchandise inventory turnover for each year.2....
Question:
Required:1. Calculate the company's merchandise inventory turnover for each year.2. Comment on the company's efficiency in managing its inventory.
ear 1 ear 2 Year 3 Cost of goods sold $347,600 $379,650 $443,900 Average inventory 85,000 91,050 98,350
Step by Step Answer:
1 Inventory turnover ratio Cost of Goods sold Average inventory Year1 Year 2 Y...View the full answer
Related Video
Inventory turnover is a key metric that helps businesses evaluate the efficiency of their operations. A high turnover ratio is generally considered positive, indicating that the company is effectively selling its inventory and making efficient use of its resources. On the other hand, a low turnover ratio may indicate issues such as overstocking or slow sales and may require further examination to identify and address the underlying causes. Businesses use this ratio to make decisions about inventory levels, production schedules, and pricing strategies. It also helps businesses to identify areas where they may need to make improvements, such as reducing lead times for production or optimizing sales and marketing efforts. Additionally, inventory turnover is used by investors and analysts as a key performance indicator to evaluate the financial health and growth potential of a company.
Students also viewed these Cost Accounting questions
-
The green division of Campana Company reported the following data for the current year: Sales...............................................................$3,000,000 Variable...
-
The green division of Campana Company reported the following data for the current year: Sales...........................................$3,000,000 Variable...
-
The Red Division of Tarkington Company reported the following data for the current year. Sales .......... $3,000,000 Variable costs ...... 1,950,000 Controllable fixed costs .. 600,000 Average...
-
What are the types of production systems in aquaculture?
-
Two-lens systems. In Figure stick figure O (the object) stands on the common central axis of two thin, symmetric lenses, which are mounted in the boxed regions. Lens 1 is mounted within the boxed...
-
Find the U.S. Eastern District Court of New York SEC v. Symbol Technologies, Inc., June 3, 2004. Explain the so-called three way round trip transactions or the candy deals.
-
Phil Rammers is confused about the source documents used in assigning materials and labor costs. Identify the documents and give the entry for each document.
-
1. To what extent were the problems facing the notebook computer development project avoidable? What could have been done to avoid these problems? 2. Would it make sense to apply a project selection...
-
9. Simple cost systems distort product costs because A) they do not know how to identify the appropriate units. B) competitive pricing is ignored. C) they emphasize financial accounting requirements....
-
The following regression results were based on monthly data over the period January 1978 to December 1987: Y t = 0.00681 ................... + 0.75815X t se = (0.02596) .................. (0.27009) t...
-
A company that uses a perpetual inventory system made the following cash purchases and sales. There was no beginning inventory. Prepare general journal entries to record the March 16 sale using the...
-
1. Identify the items that are included in merchandise inventory. (In your answer address the special situations of goods in transit, consigned goods and damaged goods.) 2. Identify and describe the...
-
Futility of treatment occurs when a physician recognizes that the effect of continuing treatment will be of no benefit to the patient. Morally, there is a duty to inform the patient when there is...
-
Common-size and trend percents for Roxi Company's sales, cost of goods sold, and expenses follow. Common-Size Percents Trend Percents Current 1 Year 2 Years Current 1 Year 2 Years Year Sales 100.0%...
-
Honda CR-V SUV commercial vehicle develops 138kW at engine speed of 7000 rpm. It is fitted with petrol engine which develops a maximum torque of 220 Nm at 4400 rpm. The vehicle gross weight is 15.7kN...
-
Entries for sale of fixed asset Equipment acquired on January 8 at a cost of $147,890 has an estimated useful life of 17 years, has an estimated residual value of $9,000, and is depreciated by the...
-
Recently, an extremely strong solar flare sent X-rays toward Earth that disrupted Earth's ionosphere. Radio waves leaving a transmitter on Earth's surface reflect off of Earth's ionosphere, and can...
-
d) Assuming Max could somehow increase his rate of return, what annual rate would he need to achieve in order to reach his goal in the original time frame of six years? (nearest 100th of a percent)....
-
Jack claims that the order in which a fixed set of entries is inserted into a binary search tree does not matterthe same tree results every time. Give a small example that proves he is wrong.
-
Do animals have rights? If so, what are they? What duties do human beings have toward animals? Does KFC protect animal welfare at an acceptable level?
-
The storage tank contains oil having a specific weight . If the tank has width w, calculate the resultant force acting on the inclined side BC of the tank, caused by the oil, and specify its location...
-
The arched surface AB is shaped in the form of a quarter circle. If it has a length L, determine the horizontal and vertical components of the resultant force caused by the water acting on the...
-
The rectangular bin is filled with coal, which creates a pressure distribution along wall A that varies as shown, i.e. p = p0(z/b)3. Determine the resultant force created by the coal and specify its...
-
Which of the following groups should be the focal point of a company's strategy? MulABC Inc. produces a single product, In doing so, the company incurs overhead costs as follows: Indirect Factory...
-
When capturing and documenting system audit requirements for an IT project, the teams is focused on capturing the following
-
Gabriela is a claims adjuster who is conducting a phone interview with a claimant. She has asked a question to openly address an issue and clarify one of the claimant's statements. Gabriella has...
Study smarter with the SolutionInn App