Question: 1) Calculate the inventory turnover using the following data for the current year 2014 Net sales on account during 2014 $ 500,000 Cost of merchandise
1) Calculate the inventory turnover using the following data for the current year 2014
| Net sales on account during 2014 | $ 500,000 |
| Cost of merchandise sold during 2014 | 330,000 |
| Accounts receivable, Jan 1, 2014 | 45,000 |
| Accounts receivable, December 31, 2014 | 35,000 |
| Inventory, Jan 1, 2014 | 90,000 |
| Inventory, December 31, 2014 | 110,000 |
| a. | 3.3 |
| b. | 8.3 |
| c. | 3.7 |
| d. | 3.0 |
2) Benjamin Nautical Company has several divisions which are investment centers. Data for the Sail Boat Division and the Yacht Trailer Division are shown here:
|
| Sail Boat Division | Yacht Division |
| Operating income | $90,000 | $36,000 |
| Total assets at Jan 1 | $670,000 | $230,000 |
| Total assets at Dec 31 | $710,000 | $220,000 |
Which of the following statements would be the most meaningful interpretation of this data?
A) Performance of Sail Boat Division is better than that of Yacht Division because Sail Boat Division has higher assets.
B) Yacht Division uses its assets more efficiently than Sail Boat Division because it has higher ROI.
C) Sail Boat Division shows more efficient use of assets than Yacht Division because it has higher operating income.
D) Sail Boat Division is more financially successful than Yacht Division because it shows an increase in assets
3) C K Venkat Chemicals estimates for July are as follows:
| Estimated inventory (units), July 1 | 8,500 |
| Desired inventory (units), July 31 | 10,500 |
| Expected sales volume (units), July | 76,000 |
For each unit produced, the direct materials needed are:
| Direct material A ($5 per lb.) | 3 lbs. |
| Direct material B ($18 per lb.) | 1/2 lb. |
Calculate the total direct materials purchases of materials A and B (assuming no beginning or ending material inventory) required for July productions:
| a. | $1,080,000 for A; $648,000 for B |
| b. | $1,080,000 for A; $1,296,000 for B |
| c. | $1,170,000 for A; $702,000 for B |
| d. | $1,125,000 for A; $675,000 for B |
4) Jackson Company had a finished goods inventory of 55,000 units on January 1. It's projected sales for the next four months were: January - 200,000 units; February - 180,000 units; March - 210,000 units; and April - 230,000 units. The Jackson Company wishes to maintain a desired ending finished goods inventory of 20% of the following months sales.
Calculate the budgeted production for January?
| a. | 236,000 |
| b. | 181,000 |
| c. | 200,000 |
| d. | 219,000 |
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