Cost of Goods Sold $10,000,000 Weeks of Operation 52 Item Number Average Level 1,400 1,000 400 Unit Value $50.00 $32.00 $60.00 $10.00 $15.00 $700.00 Total Value $70,000 $32,000 $24,000 Raw Materials 1 2 $24,000 $12,000 $224,000 $144,000 $210,000 $192,000 $400,000 4 2,400 800 Work in Process 320 7 160 $900.00 280 $750.00 240 $800.00 400 $1,000.00 $2,000.00 $3,500.00 $2,800.00 $5,000.00 $4,200.00 10 Finished Goods $120,000 $140,000 $140,000 $100,000 $168,000 $2,000,000 11 60 12 40 13 50 14 20 15 40 Total Average Weekly Sales at Cost $192,308 Weeks of Supply 10.4 Inventory Turnover 5.0
Cost of Goods Sold $10,000,000 Weeks of Operation 52 Item Number Average Level 1,400 1,000 400 Unit Value $50.00 $32.00 $60.00 $10.00 $15.00 $700.00 Total Value $70,000 $32,000 $24,000 Raw Materials 1 2 $24,000 $12,000 $224,000 $144,000 $210,000 $192,000 $400,000 4 2,400 800 Work in Process 320 7 160 $900.00 280 $750.00 240 $800.00 400 $1,000.00 $2,000.00 $3,500.00 $2,800.00 $5,000.00 $4,200.00 10 Finished Goods $120,000 $140,000 $140,000 $100,000 $168,000 $2,000,000 11 60 12 40 13 50 14 20 15 40 Total Average Weekly Sales at Cost $192,308 Weeks of Supply 10.4 Inventory Turnover 5.0
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter14: Decentralized Operations
Section: Chapter Questions
Problem 3SEQ: Division A of Kern Co. has sales of $350,000, cost of goods sold of $200,000, operating expenses of...
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Question
The Eagle Machine Company averaged $2 million in inventory last year, and the cost of goods sold was $10 million. Figure shows the breakout of raw materials, work-in-process, and finished goods inventories. The best inventory turnover in the company’s industry is six turns per year. If the company has 52 business weeks per year, how many weeks of supply were held in inventory? What was the inventory turnover? What should the company do?
![Cost of Goods Sold
$10,000,000
Weeks of Operation
52
Item Number
Average Level
1,400
1,000
400
Unit Value
$50.00
$32.00
$60.00
$10.00
$15.00
$700.00
Total Value
$70,000
$32,000
$24,000
Raw Materials
1
2
$24,000
$12,000
$224,000
$144,000
$210,000
$192,000
$400,000
4
2,400
800
Work in Process
320
7
160
$900.00
280
$750.00
240
$800.00
400
$1,000.00
$2,000.00
$3,500.00
$2,800.00
$5,000.00
$4,200.00
10
Finished Goods
$120,000
$140,000
$140,000
$100,000
$168,000
$2,000,000
11
60
12
40
13
50
14
20
15
40
Total
Average Weekly Sales at Cost
$192,308
Weeks of Supply
10.4
Inventory Turnover
5.0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ffe6e66a7-38ff-4b9c-9092-c329bfc60960%2F119755f8-33d6-4e2c-a640-68ff4a64f9ad%2Fkna1sbm.png&w=3840&q=75)
Transcribed Image Text:Cost of Goods Sold
$10,000,000
Weeks of Operation
52
Item Number
Average Level
1,400
1,000
400
Unit Value
$50.00
$32.00
$60.00
$10.00
$15.00
$700.00
Total Value
$70,000
$32,000
$24,000
Raw Materials
1
2
$24,000
$12,000
$224,000
$144,000
$210,000
$192,000
$400,000
4
2,400
800
Work in Process
320
7
160
$900.00
280
$750.00
240
$800.00
400
$1,000.00
$2,000.00
$3,500.00
$2,800.00
$5,000.00
$4,200.00
10
Finished Goods
$120,000
$140,000
$140,000
$100,000
$168,000
$2,000,000
11
60
12
40
13
50
14
20
15
40
Total
Average Weekly Sales at Cost
$192,308
Weeks of Supply
10.4
Inventory Turnover
5.0
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