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The following accounting information pertains to two retail clothing stores. One clothing store has a market strategy of selling only designer brand clothes while
The following accounting information pertains to two retail clothing stores. One clothing store has a market strategy of selling only designer brand clothes while the other store sells less expensive bargain brands. Designer Brand Tent Type Sales Cost of Goods Sold Gross Margin Average Inventory $ 504,000 Bargain Brand $ 412,000 448,000 56,000 319,300 92,700 25,120 55,120 Required: a. Calculate the inventory turnover for each clothing store. Note: Round answers to one decimal place. b. Calculate average days to sell inventory for each clothing store. Note: Round answers to the nearest whole number. c. Based on your calculations, which clothing store will be required to reorder inventory more frequently? Bargain Brand Designer Brand a Inventory turnover ratios times times b. Average days to sell inventory days days c Clothing store required to reorder inventory more frequently
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