Question
A large catalog retailer of fashion apparel reported $232,680,000 in revenues over the last year. On average, over the same year, the company had $5,540,000
A large catalog retailer of fashion apparel reported $232,680,000 in revenues over the last year. On average, over the same year, the company had $5,540,000 worth of inventory in their warehouses. Assume that units in inventory are valued based on cost of goods sold (COGS) and that the retailer has a 100 percent markup on all products.
a. How many times each year does the retailer turn its inventory?
(Round the answer to 1 decimal place.)
Turns: _______
b. The company uses a 33.6 percent per year cost of inventory. That is, for the hypothetical case that one item of $100 COGS would sit exactly one year in inventory, the company charges itself a $33.6 inventory cost. What is the inventory cost for a $30 (COGS) item? You may assume that inventory turns are independent of the price.
(Round the answer to 2 decimal places.)
Inventory cost: ________ per unit
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started