Inventory Cost [2.4]

A manufacturing company producing medical devices reported $45,000,000 in sales over the last year. At the end of the same year, the company had $18,000,000 worth of inventory of ready-to-ship devices.

a. Assuming that units in inventory are valued (based on COGS) at $500 per unit and are sold for $1,000 per unit, what are the annual inventory turns? The company uses a 21 percent per year cost of inventory. That is, for the hypothetical case that one unit of $500 would sit exactly one year in inventory, the company charges its operations division a $105 inventory cost.(Round the answer to 2 decimal places.)

Turns: _______ per yer

b. What is the per unit inventory cost in $ for a product that costs $500?(Round the answer to 2 decimal places.)

Absolute inventory cost: _______