Using the following annual information, calculate inventory turnover for (1) Raw materials inventory, (2) Work-in-process inventory, and
Question:
Using the following annual information, calculate inventory turnover for
(1) Raw materials inventory,
(2) Work-in-process inventory, and
(3) Finished goodsinventory.
$ 15,000 Beginning raw materials imventory Ending raw materials inventory Beginning workin-process inventory. Ending workin-process inventory Beginning finished goods inventory Ending finished goods inventory. Cost of raw materials used Cost of goods manufactured. Cost of goods sold. S 70,000 100,000 200,000 250,000 40,000 50,000 60,000
Step by Step Answer:
1 Inventory turnover for raw materials inventory 2 In...View the full answer
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain
Related Video
Inventory turnover is a key metric that helps businesses evaluate the efficiency of their operations. A high turnover ratio is generally considered positive, indicating that the company is effectively selling its inventory and making efficient use of its resources. On the other hand, a low turnover ratio may indicate issues such as overstocking or slow sales and may require further examination to identify and address the underlying causes. Businesses use this ratio to make decisions about inventory levels, production schedules, and pricing strategies. It also helps businesses to identify areas where they may need to make improvements, such as reducing lead times for production or optimizing sales and marketing efforts. Additionally, inventory turnover is used by investors and analysts as a key performance indicator to evaluate the financial health and growth potential of a company.
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