Chapter 16, Problem 10AT

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8th Edition

Robert Brechner + 1 other

ISBN: 9781305585447

Textbook Problem

Assuming that all net sales figures are at *retail* and all cost of goods sold figures are at *cost,* calculate the average inventory and inventory turnover for Exercises 8-11. If the actual turnover is below the published rate, calculate the target average inventory necessary to come up to industry standards. Round inventories to the nearest dollar and inventory turnovers to the nearest tenth.

Net |
Cost of |
Beginning |
Ending |
Average |
Inventory |
TargetPublished Average |
||||||||

Sales |
Goods Sold |
Inventory |
Inventory |
Inventory |
Turnover |
Rate Inventory |
||||||||

10. |
$237,550 | $24,670 | $43,120 | 5.9 |

To determine

**To calculate:** The average inventory and inventory turnover at retail, assuming that cost of goods sold is $237,550, the beginning inventory is $24,670 and the ending inventory is $43,120 also calculate the target average inventory. Round all inventories to the nearest dollar and inventory turnover to the nearest tenth.

Explanation

**Given Information:**

Cost of goods sold at retail is $237,550, the Beginning inventory and the ending inventory is $24,670 and $43,120 respectively. Published rate is 5.9.

**Formula used:**

Average inventory at cost is given by:

Inventory turnover at cost is given by:

Target average inventory at cost is given by:

**Calculation:**

First, calculate average inventory:

Put all values in the above formula

Sect-16.I P-1TIESect-16.I P-2TIESect-16.I P-3TIESect-16.I P-4TIESect-16.I P-1RESect-16.I P-2RESect-16.I P-3RESect-16.I P-4RESect-16.I P-5RESect-16.I P-6RE

Sect-16.I P-7RESect-16.I P-8RESect-16.I P-9RESect-16.I P-10RESect-16.II P-5TIESect-16.II P-6TIESect-16.II P-1RESect-16.II P-2RESect-16.II P-3RESect-16.II P-4RESect-16.II P-5RESect-16.II P-6RESect-16.II P-7RESect-16.II P-8RESect-16.II P-9RESect-16.III P-7TIESect-16.III P-8TIESect-16.III P-9TIESect-16.III P-1RESect-16.III P-2RESect-16.III P-3RESect-16.III P-4RESect-16.III P-5RESect-16.III P-6RESect-16.III P-7RESect-16.III P-8RESect-16.III P-9RESect-16.III P-10RESect-16.III P-11RESect-16.III P-12RESect-16.III P-13RESect-16.III P-14RESect-16.III P-15RECh-16 P-1CRCh-16 P-2CRCh-16 P-3CRCh-16 P-4CRCh-16 P-5CRCh-16 P-6CRCh-16 P-7CRCh-16 P-8CRCh-16 P-9CRCh-16 P-10CRCh-16 P-11CRCh-16 P-12CRCh-16 P-13CRCh-16 P-14CRCh-16 P-1ATCh-16 P-2ATCh-16 P-3ATCh-16 P-4ATCh-16 P-5ATCh-16 P-6ATCh-16 P-7ATCh-16 P-8ATCh-16 P-9ATCh-16 P-10ATCh-16 P-11ATCh-16 P-12ATCh-16 P-13AT

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