Question

In: Operations Management

1. What is your firm's Inventory Turnover if you have $200,000 cost of goods sold, raw...

1. What is your firm's Inventory Turnover if you have $200,000 cost of goods sold, raw material inventory of $10,000, finished goods inventory of $15,000 and annual sales of $400,000?

a 8

b 16

c 13.3

d 20

2.

Which of the following statements describes "level" operating strategy?

Group of answer choices

A planning strategy sets production equal to forecast demand

Maintaining constant production regardless of demand

Used two or more startegies to match production to demand

None of the above

Expert Solution

1.Answer: b; 16

Inventory turnover= Cost of goods sold/ average inventory investment

Cost of goods sold= $200,000

Average inventory investment=( raw material inventory+ finished goods inventory)/2

= (10,000+15,000)/2 = $,12500

Hence inventory turnover= 200,000/12500 = 16

2. Answer: Maintaining constant production regardless of demand

Explanation:

Level strategy is the one that maintains steady rate of output while meeting variations on demand. Hence level operating strategy is best described as maintaining constant production regardless of demand. A planning strategy that sets production equal to forecast demand is a chase strategy. A mixed strategy uses two or more strategies to match production to demand. Hence other options are wrong.

keosha answered 4 hours ago

1. Which of the following formulas gives the inventory turnover ratio? a.Average inventory/Cost of goods sold....

1. Which of the following formulas gives the inventory turnover ratio? a.Average inventory/Cost of goods sold. b.Net credit sales/Average inventory. c.Average inventory/Net credit sales. d.Cost of goods sold/Average inventory. 2. Which of the following is a total dollar measure of liquidity? a.Number of days' sales in inventory. b.Working capital. c.Accounts receivable turnover ratio. d.Cash-to-cash operating cycle. 3. Which of the following is considered a profitability ratio? a.Debt-to-equity ratio. b.Acid-test ratio. c.Earnings per share. d.Inventory turnover ratio. 4. In considering equity...

Explain the value of understanding why inventory balances, inventory turnover, cost of goods sold, operating margin,...

Explain the value of understanding why inventory balances, inventory turnover, cost of goods sold, operating margin, and working capital are important metrics for Cost Accounting for Boeing Manufacturing Corporation. In separate paragraphs just few sentences for each definitions Thank you

alculating Gross Profit and Inventory Turnover The following table presents sales revenue, cost of goods sold,...

alculating Gross Profit and Inventory Turnover The following table presents sales revenue, cost of goods sold, and inventory amounts for three computer/electronics companies, Dell Inc., Hewlett-Packard Company, and Apple Inc. $ millions Fiscal year ending Samsung Electronics Co. Ltd. (S. Korean won) Dec. 31, 2014 Dec. 31, 2013 Dec. 31, 2012 Revenues 203,205,987 225,692,667 198,103,613 Cost of goods sold 126,278,800 135,696,309 124,651,931 Inventory 15,817,504 17,634,868 16,247,413 Hewlett-Packard Company (US dollar) Oct. 31, 2014 Oct. 31, 2013 Oct. 31, 2012 Revenues...

You have created an Inventory account and a Cost of Goods Sold account, but every time...

You have created an Inventory account and a Cost of Goods Sold account, but every time you add a new inventory part item to the Item List, Quickbooks creates an Inventory Asset account and Cost of Goods Sold account. Why does this happen, and how can you correct it?

Company name Inventory turnover ratio Sales Annually Daily cost of goods sold A 5.5 $20,500,000 $20,000...

Company name Inventory turnover ratio Sales Annually Daily cost of goods sold A 5.5 $20,500,000 $20,000 B 7.8 $10,000,000 $5,000 C 3.9 $17,580,000 $15,000 Calculate the inventory conversion cycle for Company A. (hint: First find the dollar amount of inventories. Consider the inventory turnover ratio) A. 181 days B. 187 days C. 185 days D. 183 days E. 179 days

Calculation of Cost of Goods Sold: Periodic Inventory System Prepare the cost of goods sold section...

Calculation of Cost of Goods Sold: Periodic Inventory System Prepare the cost of goods sold section for Adams Gift Shop. The following amounts are known: Beginning merchandise inventory $27,050 Ending merchandise inventory 22,550 Purchases 77,125 Purchases returns and allowances 4,055 Purchases discounts 5,745 Freight-in 230 Adams Gift Shop Cost of Goods Sold Cost of goods sold: $ $ $ $ $ Cost of goods sold $

Periodic inventory by three methods; cost of goods sold

Periodic inventory by three methods; cost of goods soldThe units of an item available for sale during the year were as follows:Jan. 1Inventory180units at $108Mar. 10Purchase224units at $110Aug. 30Purchase200units at $116Dec. 12Purchase196units at $120There are 208 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the ending inventory cost and the cost of goods sold by three methods.Cost of Inventory and Cost of Goods SoldInventory MethodEnding InventoryCost of Goods SoldFirst-in, first-out...

1. Under the perpetual inventory system, inventory becomes part of cost of goods sold when a...

1. Under the perpetual inventory system, inventory becomes part of cost of goods sold when a company a. receives payment from the customer b. purchases the inventory c. sells the inventory d. pays for the inventory 2. In credit terms of 4/13, n/45, the "4" represents the a. number of days in the discount period b. number of days when the entire amount is due c. full amount of the invoice d. percent of the cash discount 3. Merchandise with...

what would be the effect on the Cost of goods sold, Ending inventory, net income and...

what would be the effect on the Cost of goods sold, Ending inventory, net income and income tax if the prices of inventory are decreasing (deflation). Using LIFO and FIFO

Based on the information below what would the ending inventory and the cost of goods sold...

Based on the information below what would the ending inventory and the cost of goods sold be for Gargleblaster Inc (GI) under the following cost flow assumptions? Ending Inventory Cost of Goods Sold 1. LIFO (periodic inventory method) $ $ 2. FIFO (periodic inventory method) $ $ 3. LIFO (perpetual inventory method) $ $ 4. FIFO (perpetual inventory method) $ $ Quantity Cost per Unit Total Beginning Inventory 200 units $10 ...