Formula: Inventory turns = Cost of goods sold / Average aggregate value of inventory Days of supply = Average aggregate value of inventory/ (Cost of goods sold / total days) Question: Determine the number of inventory turns and the days of supply for the furniture company.
Formula: Inventory turns = Cost of goods sold / Average aggregate value of inventory Days of supply = Average aggregate value of inventory/ (Cost of goods sold / total days) Question: Determine the number of inventory turns and the days of supply for the furniture company.
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Question
![2. The Ashton Furniture Company manufactures coffee tables and chest of drawers. Last year the company's
cost of goods sold was $3,700,000, and it carried inventory of oak, pine, stains, joiners, and brass fixtures,
work-in-process of furniture frames, drawers and wood panels, and finished chests and coffee tables. Its
average inventory levels for a 52-week* business year were as follows.
Raw Materials
Oak
Pine
Brass fixtures
Stains
Joiners
Work-in-Process
Frames
Drawers
Panels
Chests
Tables
Finished Goods
Chests
Coffee tables
*1 week = 7 days
Average Inventory
8000
4500
1200
3000
900
200
400
600
120
90
300
200
Unit Cost
$6
4
8
2
1
$30
10
50
110
90
$500
350
Formula:
Inventory turns = Cost of goods sold / Average aggregate value of inventory
Days of supply = Average aggregate value of inventory / (Cost of goods sold / total days)
Question:
Determine the number of inventory turns and the days of supply for the furniture company.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F31448fb8-1eeb-47f7-a161-c1756db8ab59%2Ff362eea6-33ae-475d-a702-10aefe1806a3%2Fcis58xv_processed.png&w=3840&q=75)
Transcribed Image Text:2. The Ashton Furniture Company manufactures coffee tables and chest of drawers. Last year the company's
cost of goods sold was $3,700,000, and it carried inventory of oak, pine, stains, joiners, and brass fixtures,
work-in-process of furniture frames, drawers and wood panels, and finished chests and coffee tables. Its
average inventory levels for a 52-week* business year were as follows.
Raw Materials
Oak
Pine
Brass fixtures
Stains
Joiners
Work-in-Process
Frames
Drawers
Panels
Chests
Tables
Finished Goods
Chests
Coffee tables
*1 week = 7 days
Average Inventory
8000
4500
1200
3000
900
200
400
600
120
90
300
200
Unit Cost
$6
4
8
2
1
$30
10
50
110
90
$500
350
Formula:
Inventory turns = Cost of goods sold / Average aggregate value of inventory
Days of supply = Average aggregate value of inventory / (Cost of goods sold / total days)
Question:
Determine the number of inventory turns and the days of supply for the furniture company.
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