BIT Electronics is a manufacturer of computer components. Last year,BIT had average inventories as described in the following table:# of units unit cost ($)29,500raw material 118.50raw material 237,50013.20raw material 3work-in-process 1work-in-process 2work-in-process 3work-in-process 4finished goods1,250,30011.654,85056.752,95062.256,120100.855,69092,85084.30315.00The company operates 50 weeks/year, with annual sales of $322.85 million. (a) What was their average aggregate inventory value?(b) What was their average inventory (measured in weeks of supply)?(c) What was their inventory turnover?BIT operates on a build-to-stock policy, and therefore stores its finishedgoods in a warehouse capable of housing up to 70,000 units. Its annual over-head cost (fixed cost) is $117,000; and it costs $3/unit to house the finishedgoods. BIT has been approached by a warehouse company offering to housethe finished goods for a unit cost of $4.5/unit, with an annual contract cost of$30,000.(d) Should BIT continue operating its own warehouse, or should it employthe warehouse company? Why?

Name: BIT Electronics is a manufacturer of computer components. Last year,B
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Description: BIT Electronics is a manufacturer of computer components. Last year,BIT had average inventories as described in the following table:# of units unit cost ($)29,500raw material 118.50raw material 237,50013.20raw material 3work-in-process 1work-in-proc

a) Average Inventory Value = Raw Material Value + WIP Value + Finished goods Value Average…

Business

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lectronics is a manufacturer of computer components. La EIT had average inventories as described in the following table: # of units unit cost ($) raw material 1 29,500 37,500 18.50 raw material 2 13.20 raw material 3 1,250,300 11.65 work-in-process 1 work-in-process 2 work-in-process 3 work-in-process 4 finished goods 4,850 56.75 2,950 62.25 6,120 100.85 5,690 84.30 92,850 315.00

lectronics is a manufacturer of computer components. La EIT had average inventories as described in the following table: # of units unit cost ($) raw material 1 29,500 37,500 18.50 raw material 2 13.20 raw material 3 1,250,300 11.65 work-in-process 1 work-in-process 2 work-in-process 3 work-in-process 4 finished goods 4,850 56.75 2,950 62.25 6,120 100.85 5,690 84.30 92,850 315.00

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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