The following table shows financial data (year 2009) for two US retailers: Save-A-Lot Retailers and Wally's Mart.Assume that both companies have an average annual holding cost rate of 20% (I.e. it costs both retailers $2 to hold anitem for one entire year that they procured for $10).Save-A-LotWally's MartInventories ($MM)Sales (net $MM)COGS ($MM)5,74340,69459,217397,20653,962316,606How much lower, on average, is the inventory cost for Save-A-Lot compared to Wally's Mart of a household cleaner valuedat $50 COGS? Give your answer in terms of dollars. Assume that the unit cost of the household cleaner is the same forboth companies and that the price and the inventory turns of an item are independent.

Answered: ssume that both companies have an…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Problem 1Q

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ssume that both companies have an average annual holding cost rate of 20% (1.e. it costs both retailers $2 to hi em for one entire year that they procured for $10). Save-A-Lot Wally's Mart Inventories ($MM) Sales (net $MM) COGS ($MM) 5,743 40,694 59,217 397,206 53,962 316,606