6.0 Calculate the average manufacturing period and the average storage period. We know the following data of
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6.0 Calculate the average manufacturing period and the average storage period.
We know the following data of the company Perfilados, S.A:
- It bought and consumed € 105,000 in raw materials for the manufacture of its product and, on average, maintained a stock level of them in the stock of € 9,250. Calculate the average storage period.
Average storage time = (average inventory / cost of annual purchases) x 360 days
Calculation: 9250/105000*365=32.2 days is this right?
- The cost of its annual production is € 198,000, and the average value of the products under development is € 11,000. Calculate the average manufacturing period.
- Taking into account that the company exclusively sold all its annual production and that the average value of its stock in the finished goods warehouse was € 18,500, it calculates its average sales period.
Average accounts receivable ÷ (Annual sales ÷ 365 days)
- Assuming that the company sold its products for an amount of € 290,000 and that the customers had on average a debt with the company of € 17,000, it calculates the average collection period.
Receivables turnover= Sales Revenue/Any accounts receivables
Average Collection Period=365/Receivable turnover
Related Book For
Managerial Accounting Tools for business decision making
ISBN: 978-1118096895
6th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
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