A company reports the following: Cost of goods sold....... $435,000 Average inventory ....... 72,500 Determine (a) The
Question:
A company reports the following:
Cost of goods sold....... $435,000
Average inventory ....... 72,500
Determine
(a) The inventory turnover and
(b) The number of days’ sales in inventory. Round to one decimal place.
Step by Step Answer:
a Inventory Turnover Cost of Goods Sold Average Inventory Inventory Turno...View the full answer
Financial And Managerial Accounting
ISBN: 9781337119207
14th Edition
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
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 Managerial Accounting questions
-
Inventory turnover is calculated as cost of goods sold divided by ending inventory . 1. True 2. False
-
A company reports the following information from its financial statements: Required Conduct horizontal and vertical analyses of inventory for the current year. Round percentages to one decimal point...
-
A company reports the following for accounts receivable: Required For each year, determine the company's total or gross accounts receivable, net realizable value of accounts receivable, and allowance...
-
What does the following code fragment print? String \(s=\) "He11o World"; s. toUpperCase(); s. substring (6, 11); StdOut.println(s);
-
Consider a fictitious one-dimensional system with one electron. The wave function for the electron, drawn at the top of the next page, is Ï(x) = sin x from x = 0 to x = 2Ï. (a) Sketch the...
-
Outline the components of the simplified model of participant consumer behavior.
-
What happens to the difference between the carrying amount of bonds and the principal amount of the bonds over time?
-
Uncle Elmo is contemplating a $10,000 investment in a methane gas generator. He estimates his gross income would be $2000 the first year and increase by $200 each year over the next 10years. His...
-
Freeman Company purchased a tract of land on which is located a warehouse and a building. The cash purchase price was $252,000 plus $18,000 in fees connected with the purchase. The following...
-
A plant has water tank mounted on the top of a 27 m platform. The tank is 10 m high. Calculate the height of the water in the tank if a pressure gauge on the second floor at a height of 5 m from the...
-
A company reports the following: Cost of goods sold .......$630,000 Average inventory ....... 90,000 Determine (a) The inventory turnover (b) The number of days sales in inventory. Round to one...
-
The following information was taken from Einar Companys balance sheet: Fixed assets (net) ........$1,800,000 Long-term liabilities ......... 600,000 Total liabilities ......... 900,000 Total...
-
A developer wants to know if the houses in two different neighborhoods were built at roughly the same time. She takes a random sample of six houses from each neighborhood and finds their ages from...
-
9 3 5 Solve: 2x 8 6x
-
Why do some multinational companies seem reluctant to provide basic information services before expatriation?
-
Complete your conflict management assessment here and then answer the following questions. What was your preferred Conflict Management Style? Do you have a clear preference or are you divided between...
-
3. Let X be a random variable with density fx(x). Suppose the density fx is symmetric about x = a; that is fx(a + x) = fx( - x). In a couple of simple steps, show that E[X] = .
-
If libraries were closed and access to information privatized, what would be the impact on communities and schools? If libraries were all to close or become restricted, where would individuals go to...
-
What is vertical gene transfer?
-
Suppose that a flow network G = (V, E) violates the assumption that the network contains a path s t for all vertices V. Let u be a vertex for which there is no path s u t. Show that there must...
-
Deeply rooted values and ways of thinking that regulate firm behavior characterize __________. A. a strong culture B. a weak culture C. the organizational culture D. none of the above
-
Variable manufacturing costs are $ 13 per unit, and fixed manufacturing costs are $ 75,000. Sales are estimated to be 12,000 units. a. How much would absorption costing income from operations differ...
-
Variable manufacturing costs are $ 126 per unit, and fixed manufacturing costs are $ 157,500. Sales are estimated to be 10,000 units. a. How much would absorption costing income from operations...
-
Variable manufacturing costs are $ 126 per unit, and fixed manufacturing costs are $ 157,500. Sales are estimated to be 10,000 units. a. How much would absorption costing income from operations...
-
1. What basis of pricing is Disney planning to adopt? Why?
-
Brief description of below Political compass Ideology Globalization Global division of labour Carbon budget Carbon pricing
-
The owner of Kamisoto Company presented the following statement of profits for the year December 31, 2020. Kamisoto Statement of Profits Revenue from sales P80,500 Operating expenses: Salaries paid...
Study smarter with the SolutionInn App