Early in 2012, Aragon Company switched to a just-in-time inventory system. Its sales and inventory amounts for
Question:
Early in 2012, Aragon Company switched to a just-in-time inventory system. Its sales and inventory amounts for 2011 and 2012 are shown below.
Determine the inventory turnover and days in inventory for 2011 and 2012. Discuss the changes in the amount of inventory, the inventory turnover and days in inventory, and the amount of sales across the two years.
2012 $3,713,000 1,425,000 2011 Sales revenue $3,120,000 Cost of goods sold Beginning inventory 170,000 210,000 210,000 90,000 Ending inventory
Step by Step Answer:
2011 2012 Inventory 1200000 63 1425000 95 turnover ...View the full answer
Financial Accounting Tools for business decision making
ISBN: 978-0470534779
6th Edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
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
-
Early in 2010 Aragon Company switched to a just-in-time inventory system. Its sales, cost of goods sold, and inventory amounts for 2009 and 2010 are shown below. Determine the inventory turnover and...
-
Early in 2012, Paulo Company switched to a just-in-time inventory system. Its sales, cost of goods sold, and inventory amounts for 2011 and 2012 are shown below.Determine the inventory turnover and...
-
Early in 2014, Racine Company switched to a just-in-time inventory system. Its sales, cost of goods sold, and inventory amounts for 2013 and 2014 are shown below. Determine the inventory turnover and...
-
A bank reconciliation takes time and must balance. An employee was struggling in balancing the bank reconciliation. Her supervisor told her to plug (make an unsupported entry for) the difference,...
-
Neglecting friction, determine the tension in cable ABD and the reaction at C when = 45. 90 2a
-
After researching the market, Waldo Books (see Problem 8-21) has concluded that the probabilities of selling 50, 100, 150, and 200 books next month are 0.2,0.35, 0.25, and 0.2, respectively. (a)...
-
Sennapods plc is contemplating an organizational restructuring. At present, the company is organized functionally, as follows: Sennapods plc has 3 main product ranges, health foods, medications for...
-
A stream of air enters a 7.50-cm ID pipe at a velocity of 60.0 m/s at 27C and 1.80 bar (gauge). At a point downstream, the air flows through a 5.00 cm ID pipe at 60C and 1.53bar (gauge). What is the...
-
To indirectly measure the distance across a river, Makayla stands on one side of the river and uses sight-lines to a landmark on the opposite bank. Makayla draws the diagram below to show the lengths...
-
Reconsider Problem 6.5. Suppose now that, for administrative convenience, management has decided that all 130 units per month needed at the distribution center in Los Angeles must come from the...
-
Bardell Company sells three different categories of tools (small, medium and large). The cost and market value of its inventory of tools are as follows. Determine the value of the company's inventory...
-
Worthmore Bank and Trust is considering giving Madsen Company a loan. Before doing so, it decides that further discussions with Madsens accountant may be desirable. One area of particular concern is...
-
Since 2005, McKinsey has conducted annual consumer surveys in China, interviewing a total of more than 60,000 people in upward of 60 cities. Those surveys provide insights to help focus on the...
-
What is VRIO telling you about Starbucks' core competencies? Explain 1. What is VRIO telling you about Starbucks' core competencies? Explain Valuable Rare Starbucks has a strong financial position,...
-
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@$63 per unit) Cost of goods sold (@ $38 per unit) Gross margin Selling...
-
Throughout history, empires have risen and fallen. What was a key difference in how empires interacted with and incorporated conquered territories in the early modern era (14501750) compared to the...
-
Houpe Corporation produces and sells a single product. Data concerning that product appear below: Percent of Selling price Variable expenses Per Unit $ 140 42 Contribution margin $ 98 Sales 100% 30%...
-
I have a small business, and I'm overwhelmed by all the different marketing channels out there. Social media, email marketing, and content marketinghow do I know where to focus?
-
Make up an example that shows why the choice of measures of central tendency requires attention.
-
In the current year, the City of Omaha donates land worth $500,000 to Ace Corporation to induce it to locate in Omaha and create an estimated 2,000 jobs for its citizens. a. How much income, if any,...
-
Evaluate the integral using the appropriate method or combination of methods covered thus far in the text. You may use the integral tables at the end of the text, but do not use a computer algebra...
-
For Deines Company, variable costs are 70% of sales, and fixed costs are $210,000. Management's net income goal is $60,000. Compute the required sales needed to achieve management's target net income...
-
For Westerville Company actual sales are $1,200,000 and break-even sales are $900,000. Compute (a) The margin of safety in dollars (b) The margin of safety ratio.
-
Bruno Corporation sells three different models of mosquito "zapper." Model A12 sells for $50 and has variable costs of $40. Model B22 sells for $100 and has variable costs of $70. Model C124 sells...
-
Way Cool produces two different models of air conditioners. The company produces the mechanical systems in its components department. The mechanical systems are combined with the housing assembly in...
-
Hatch Manufacturing produces multiple machine parts. The theoretical cycle time for one of its products is 30 minutes per unit. The budgeted conversion costs for the manufacturing cell dedicated to...
-
The objective of the Additional Refundable Tax on Investment Income is to discourage the use of a Canadian controlled private corporation to defer taxes on investment income. . True False
Study smarter with the SolutionInn App