Based on the following information, how many days of supply of inventory is the firm holding (assume 220 days of operation per year)? Do not round intermediate calculations. Round your answer to one decimal place. Sales$8,000,000Cost of goods sold$6,050,000Gross profit$1,950,000Overhead costs$500,000Net profit$1,450,000Total inventory$2,900,000Fixed assets$3,300,000Long-term debt$2,900,000 Inventory days' supply: days' supplyInterpret your answer if the industry average inventory days' supply is 35 days. Round your answer to one decimal place.If the industry average days' supply is 35 days and this firm's IDS is times more, they inventory management problems.

Inventory turnover = Cost of goods sold / Average Inventory = $6,050,000 / 2,900,000 = 2.09 times

Answered: Based on the following information, how…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Based on the following information, how many days of supply of inventory is the firm holding (assume 220 days of operation per year)? Do not round intermediate calculations. Round your answer to one decimal place.

Sales	$8,000,000
Cost of goods sold	$6,050,000
Gross profit	$1,950,000
Overhead costs	$500,000
Net profit	$1,450,000
Total inventory	$2,900,000
Fixed assets	$3,300,000
Long-term debt	$2,900,000