Asked by Daniel Juarez on May 09, 2024
Verified
A company reported the following data:
Required:
1.Calculate the company's merchandise inventory turnover for each year.
2.Comment on the company's efficiency in managing its inventory.
Merchandise Inventory Turnover
A measure of how many times a company’s inventory is sold and replaced over a specific period.
Inventory Management
The process of ordering, storing, and using a company's inventory, including raw materials, components, and finished products.
- Execute inventory valuation by leveraging FIFO, LIFO, and weighted average in perpetual and periodic regimes.
- Investigate the influence of inventory valuation techniques on the financial statements and tax outcomes.
Verified Answer
RR
Ricardo RodriguezMay 12, 2024
Final Answer :
1.Year 1 $317,500/72,000 = 4.41
Year 2 $279,100/93,000 = 3.00
2.The company's efficiency in managing its inventory is decreasing as its sales of merchandise decrease.This is a negative reflection on inventory management.
Year 2 $279,100/93,000 = 3.00
2.The company's efficiency in managing its inventory is decreasing as its sales of merchandise decrease.This is a negative reflection on inventory management.
Learning Objectives
- Execute inventory valuation by leveraging FIFO, LIFO, and weighted average in perpetual and periodic regimes.
- Investigate the influence of inventory valuation techniques on the financial statements and tax outcomes.
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