Answered: Raw Materials Average Inventory 70,000…

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

Barington Mills manufactures denim cloth from two pri-
mary raw materials, cotton and dye. Work-in-process

includes lapped cotton, spun yarn, and undyed cloth, while
finished goods includes three grades of dyed cloth. The
average inventory amounts on hand at any one time last
year and the unit costs are as follows.

The company operates 50 weeks per year, and its cost of
goods sold for the past year was $17.5 million.
Determine the company’s inventory turns and weeks of
supply.

Raw Materials
Average Inventory
70,000 lb.
Unit Cost
Cotton
$2.75
Dye
125,000 gal.
5.00
Work-in-Process
Lapped cotton
2000 rolls
$10.50
Spun yarn
5000 spools
6.75
Undyed cloth
500 rolls
26.10

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