Assuming that all net sales figures are at retail and all cost of goods sold figures are at cost, calculate the average inventory (in $) and inventory turnover for the following. If the actual turnover is less than the published rate, calculate the target average inventory necessary to come up to industry standards. If the actual turnover is greater than the published rate, enter "above" for target average inventory. Round inventories to the nearest dollar and inventory turnovers to the nearest tenth Net Sales $580,000 Cost of Goods Sold Beginning Inventory $131,250 Ending Inventory $77,200 $ Average Inventory Inventory Turnover Published Rate 4.8 $ Target Average Inventory
Assuming that all net sales figures are at retail and all cost of goods sold figures are at cost, calculate the average inventory (in $) and inventory turnover for the following. If the actual turnover is less than the published rate, calculate the target average inventory necessary to come up to industry standards. If the actual turnover is greater than the published rate, enter "above" for target average inventory. Round inventories to the nearest dollar and inventory turnovers to the nearest tenth Net Sales $580,000 Cost of Goods Sold Beginning Inventory $131,250 Ending Inventory $77,200 $ Average Inventory Inventory Turnover Published Rate 4.8 $ Target Average Inventory
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Assuming that all net sales figures are at retail and all cost of goods sold figures are at cost, calculate the average inventory (in $) and inventory turnover for the following. If the actual turnover is less than the published rate, calculate the target average inventory
necessary to come up to industry standards. If the actual turnover is greater than the published rate, enter "above" for target average inventory. Round inventories to the nearest dollar and inventory turnovers to the nearest tenth
Net Sales
$580,000
Cost of
Goods Sold
Beginning
Inventory
$131,250
Ending
Inventory
$77,200 $
Average
Inventory
Inventory
Turnover
Published
Rate
4.8
$
Target
Average
Inventory
Expert Solution
Step 1: Inventory turnover
Inventory turnover measures how quickly stock is sold, used up, and replaced. The cost of products is divided by the average inventory for the same time period to determine the inventory turnover ratio. Higher ratios typically indicate robust sales, while lower ones typically indicate dismal sales.
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