P7-7 Evaluating the Effects of Manufacturing Changes on Inventory Turnover Ratio and Cash Flows from Operating Activities LO7-5, 7-7 [The following information applies to the questions displayed below.) Mears and Company has been operating for five years as an electronics component manufacturer specializing in cellular phone components. During this period, it has experienced rapid growth in sales revenue and in inventory. Mr. Mears and his associates have hired you as Mears's first corporate controller. You have put into place new purchasing and manufacturing procedures that are expected to reduce inventories by approximately one-third by year-end. You have gathered the following data related to the changes: Cost of goods Section Break 27 Evaluating the hects of Inventory Turnover Ratio and ActS LOT 5.27 4. 20.00 points P7-7 Part 1 Required: 1. Compute the inventory turnover ratio based on two different assumptions: (Round your answers to 1 decimal place.) a. Those presented in the above table (a decrease in the balance in inventory). b. No change from the beginning-of-the-year inventory balance. Practed a Change from Required: 1. Compute the inventory turnover ratio based on two different assumptions: (Round your answers to 1 decimal place.) a. Those presented in the above table (a decrease in the balance in inventory) b. No change from the beginning-of-the-year inventory balance References Book & Resources PT Part 1 Learning Objective: 07-05 Check my work 5. 20.00 points P7-7 Part 2 2. What is the effect of the projected change in the balance in inventory on cash flow from operating activities for the year. O A decrease in inventory will not affect the cash flow from operating activities A decrease in inventory will increase the cash flow from operating activities O A decrease in inventory will decrease the cash flow from operating activities References Book & Resources Worksheet D OT-OT Unded methods P2Part 2 Learning 705 Check my work P7-7 Evaluating the Effects of Manufacturing Changes on Inventory Turnover Ratio and Cash Flows from Operating Activities LO7-5, 7-7 [The following information applies to the questions displayed below.) Mears and Company has been operating for five years as an electronics component manufacturer specializing in cellular phone components. During this period, it has experienced rapid growth in sales revenue and in inventory. Mr. Mears and his associates have hired you as Mears's first corporate controller. You have put into place new purchasing and manufacturing procedures that are expected to reduce inventories by approximately one-third by year-end. You have gathered the following data related to the changes: Cost of goods Section Break 27 Evaluating the hects of Inventory Turnover Ratio and ActS LOT 5.27 4. 20.00 points P7-7 Part 1 Required: 1. Compute the inventory turnover ratio based on two different assumptions: (Round your answers to 1 decimal place.) a. Those presented in the above table (a decrease in the balance in inventory). b. No change from the beginning-of-the-year inventory balance. Practed a Change from Required: 1. Compute the inventory turnover ratio based on two different assumptions: (Round your answers to 1 decimal place.) a. Those presented in the above table (a decrease in the balance in inventory) b. No change from the beginning-of-the-year inventory balance References Book & Resources PT Part 1 Learning Objective: 07-05 Check my work 5. 20.00 points P7-7 Part 2 2. What is the effect of the projected change in the balance in inventory on cash flow from operating activities for the year. O A decrease in inventory will not affect the cash flow from operating activities A decrease in inventory will increase the cash flow from operating activities O A decrease in inventory will decrease the cash flow from operating activities References Book & Resources Worksheet D OT-OT Unded methods P2Part 2 Learning 705 Check my work
