A small firm has a beginning inventory of $52,000 as of January 1, 2020, and the following accounting information. Month Ending Inventory Cost of Goods Sold January 2020 $75,000 $225,000 February 2020 $56,000 $325,000 March 2020 $25,000 $240,000 April 2020 $85,000 $325,000 May 2020 $125,000 $460,000 June 2020 $95,000 $220,000 July 2020 $72,000 $85,000 August 2020 $45,000 $156,000 September 2020 $52,500 $220,000 October 2020 $120,000 $265,000 November 2020 $162,500 $100,000 December 2020 $255,000 $350,000 Compute the monthly inventory turnover ratio for each of the twelve months. What are the annual cost of goods sold and the average inventory for the year? Compute the annual inventory turnover ratio. What can the purchasing department do to improve the firm’s performance?
A small firm has a beginning inventory of $52,000 as of January 1, 2020, and the following accounting information.
Month Ending Inventory Cost of Goods Sold
January 2020 $75,000 $225,000
February 2020 $56,000 $325,000
March 2020 $25,000 $240,000
April 2020 $85,000 $325,000
May 2020 $125,000 $460,000
June 2020 $95,000 $220,000
July 2020 $72,000 $85,000
August 2020 $45,000 $156,000
September 2020 $52,500 $220,000
October 2020 $120,000 $265,000
November 2020 $162,500 $100,000
December 2020 $255,000 $350,000
Compute the monthly inventory turnover ratio for each of the twelve months.
What are the annual cost of goods sold and the average inventory for the year?
Compute the annual inventory turnover ratio. What can the purchasing department do to improve the firm’s performance?
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