The following accounting information pertains to two grocery store chains. One grocery store chain has a market strategy of selling only high end organic food products while the other grocery store sells less expensive foods that are traditionally grown with the use of pesticides, synthetic fertilizers, and/or genetically modified organisms. The company selling traditional produced foods has an average inventory balance of $45,000, while the company selling organic foods has an average inventory balance of $40,000.

a. Complete the table by filling in the missing amounts. b. Which grocery store chain is taking a lower cost/higher volume strategy as it relates to sales? c1. Calculate the inventory turnover and average days to sell inventory for each grocery store chain. c2. Based on your calculations, which grocery chain will be required to reorder inventory more frequently?

a.

	Traditional		Organic
sales	$600,000		$500,000
cost of goods sold			$300,000
gross margin			$200,000
gross margin percentage	35	%		%

C1.

	Inventory Turnover Ratios	Average days to sell inventory
Traditional	times	days
Organic	times	days