PROBLEM 21. The following figures are taken from the records of a Co. for the year 2006. Thevaluation of inventory is $. 2.00 per kg.Opening Stock1,400 kgs.2,000 kgs.Closing Stock400 kgs.2,400 kgs.PurchasesMaterial X23,000 kgs.3,600 kgs.Material YCalculate the material turnover ratio of thè above two materials and express in number of days theaverage inventory is held. Also determine which of the two materials is fast moving.

The inventory turnover ratio is calculated as cost of goods sold divided by average inventory.

FROBLEM 21. The following figures are taken from the records of a Co. for the year 2006. The valuation of inventory is $. 2.00 per kg. Closing Stock 400 kgs. 2,400 kgs. Purchases Opening Stock 1,400 kgs. 2,000 kgs. Material X 23,000 kgs. 3,600 kgs. Material Y Calculate the material turnover ratio of thè above two materials and express in number of days the average inventory is held. Also determine which of the two materials is fast moving.

FROBLEM 21. The following figures are taken from the records of a Co. for the year 2006. The valuation of inventory is $. 2.00 per kg. Closing Stock 400 kgs. 2,400 kgs. Purchases Opening Stock 1,400 kgs. 2,000 kgs. Material X 23,000 kgs. 3,600 kgs. Material Y Calculate the material turnover ratio of thè above two materials and express in number of days the average inventory is held. Also determine which of the two materials is fast moving.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 46E

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