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
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
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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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
![### Calculating Average Inventory and Inventory Turnover
**Instructions:**
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 data. 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.
**Provided Data:**
| **Net Sales** | **Cost of Goods Sold** | **Beginning Inventory** | **Ending Inventory** | **Average Inventory** | **Inventory Turnover** | **Published Rate** | **Target Average Inventory** |
|---------------|-------------------------|-------------------------|----------------------|----------------------|-----------------------|------------------|---------------------------|
| $560,000 | | | | | | | |
| | $131,250 | $73,200 | | | 4.8 | 8 | |
In the table above:
- **Net Sales** is $560,000.
- **Cost of Goods Sold** is $131,250.
- **Beginning Inventory** is $73,200.
- **Published Rate** is 4.8.
- **Target Average Inventory** is marked as 8.
**Steps to Calculate:**
1. **Calculate the Average Inventory:**
\[
\text{Average Inventory} = \frac{\text{Beginning Inventory} + \text{Ending Inventory}}{2}
\]
2. **Calculate Inventory Turnover:**
\[
\text{Inventory Turnover} = \frac{\text{Cost of Goods Sold}}{\text{Average Inventory}}
\]
3. **Compare Actual Turnover to Published Rate:**
If the actual inventory turnover is less than the published rate, calculate the target average inventory:
\[
\text{Target Average Inventory} = \frac{\text{Cost of Goods Sold}}{\text{Published Rate}}
\]
If greater, write "above" in the Target Average Inventory column.
**Note:**
Round Average Inventory to the nearest dollar and Inventory Turnovers to the nearest tenth.
Use these guidelines to fill in the blanks and determine whether adjustments need to be made to](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F58acaeb0-447a-4f64-ba93-093e5846ac29%2Fbf58ce83-1d2f-45b7-a378-f6714478aa6c%2F57k9z9r_processed.jpeg&w=3840&q=75)
Transcribed Image Text:### Calculating Average Inventory and Inventory Turnover
**Instructions:**
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 data. 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.
**Provided Data:**
| **Net Sales** | **Cost of Goods Sold** | **Beginning Inventory** | **Ending Inventory** | **Average Inventory** | **Inventory Turnover** | **Published Rate** | **Target Average Inventory** |
|---------------|-------------------------|-------------------------|----------------------|----------------------|-----------------------|------------------|---------------------------|
| $560,000 | | | | | | | |
| | $131,250 | $73,200 | | | 4.8 | 8 | |
In the table above:
- **Net Sales** is $560,000.
- **Cost of Goods Sold** is $131,250.
- **Beginning Inventory** is $73,200.
- **Published Rate** is 4.8.
- **Target Average Inventory** is marked as 8.
**Steps to Calculate:**
1. **Calculate the Average Inventory:**
\[
\text{Average Inventory} = \frac{\text{Beginning Inventory} + \text{Ending Inventory}}{2}
\]
2. **Calculate Inventory Turnover:**
\[
\text{Inventory Turnover} = \frac{\text{Cost of Goods Sold}}{\text{Average Inventory}}
\]
3. **Compare Actual Turnover to Published Rate:**
If the actual inventory turnover is less than the published rate, calculate the target average inventory:
\[
\text{Target Average Inventory} = \frac{\text{Cost of Goods Sold}}{\text{Published Rate}}
\]
If greater, write "above" in the Target Average Inventory column.
**Note:**
Round Average Inventory to the nearest dollar and Inventory Turnovers to the nearest tenth.
Use these guidelines to fill in the blanks and determine whether adjustments need to be made to
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