Question

Sony Corporation manufactures and sells cell phones directly to mobile telecommunications service suppliers. The company reported the following amounts for fiscal year 2013 (in billions of yen):
Net sales revenue ........ 6,304
Cost of sales ........... .. 4,831
Beginning inventory ........ 710
Ending inventory ......... 707
Required:
1. Determine the inventory turnover ratio and the average days to sell inventory for the current year.
2. Explain the meaning of each of the amounts computed in (1).
3. Indicate whether the inventory turnover ratio will increase, decrease, or remain unchanged as a result of the following changes in inventory management. Justify your answers.
a. Have parts inventory delivered daily by suppliers instead of weekly.
b. Extend payments for inventory purchases from 30 days to 45 days.
c. Shorten the production process from 10 days to 8 days.


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  • CreatedAugust 04, 2015
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