13th Edition

ISBN: 9780135173626

Author: HEIZER, Jay, RENDER, Barry, Munson, Chuck

Publisher: Pearson,

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Textbook Question

Chapter 11, Problem 5P

Question:

•• 11.5 Baker Mfg. Inc. (see Table 11.9) wishes to compare its inventory turnover to those of industry leaders, who have turnover of about 13 times per year and 8% of their assets invested in inventory.

TABLE 11.9 For Problems 11.5 and 11.6

ARROW DISTRIBUTING CORP.
Net revenue	$16,500
Cost of sales	$13,500
Inventory	$1,000
Total assets	$8,600
BAKER MFG. INC.
Net revenue	$27,500
Cost of sales	$21,500
Inventory	$1,250
Total assets	$16,600

a. What is Baker’s inventory turnover?
b. What is Baker’s percent of assets committed to inventory?
c. How does Baker’s performance compare to the industry leaders?

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Chapter 11, Problem 3P

Chapter 11, Problem 6P

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Solution Summary: The author explains how the turnover of Company B is calculated by dividing cost of sales with inventory.

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