The following information is for Bun MaScare Company: Required: Assuming 365 days in a year, compute the
Question:
Required:
Assuming 365 days in a year, compute the following. (Note: Preparing a cost of goods manufactured schedule and a costs of goods sold schedule may be helpful in solving the problem.)
1. Inventory turnover for raw materials
2. Days in ending raw materials inventory
3. Inventory turnover for work in process
4. Days in ending work-in-process inventory
5. Inventory turnover for finished goods
6. Days in ending finished goods inventory
7. Interpretive Question: What conclusions can you draw from your inventory turnovercalculations?
S 25,000 Ending work-in-process inventory Beginning raw materials inventory Raw materials purchased Ending raw materials inventory Manufacturing overhead (actual) Beginning work-in-process S 40,000 Direct labor costs. 15,000 Beginning finished goods inventory 300,000 Ending finished goods inventory Overapplied manufacturing 50,000 overhead. 200,000 270,000 15,000 inventory.
Step by Step Answer:
Preparation of cost of goods manufactured and cost of goods sold schedules simplifies the computatio...View the full answer
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain
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.
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