Kent Inc. provided the following data for 2016 and 2017: Inventory December 31,
ID: 2562573 • Letter: K
Question
Kent Inc. provided the following data for 2016 and 2017:
Inventory
December 31, 2016
$250,000
December 31, 2017
180,000
Cost of goods sold
2016
$650,000
2017
645,000
Gross margin
2016
$340,000
2017
430,000
What are the inventory turnover ratio and the gross margin return on inventory investment for 2017?
Inventory turnover ratio = 3.00 times
The gross margin return on inventory investment = 200%
Inventory turnover ratio = 2.00 times
The gross margin return on inventory investment = 300%
Inventory turnover ratio = 3.09 times
The gross margin return on inventory investment = 20%
Inventory turnover ratio = 3.00 times
The gross margin return on inventory investment = 2%
The ratio of value-added manufacturing time to the total of both value and non-value-added manufacturing times is known as
productivity turnover.
cycle time processing.
cycle efficiency.
the value ratio.
Inventory
December 31, 2016
$250,000
December 31, 2017
180,000
Cost of goods sold
2016
$650,000
2017
645,000
Gross margin
2016
$340,000
2017
430,000
Explanation / Answer
Inventory turnover ratio = Cost of goods sold/Average inventory =645000/(250000+180000)/2= 3 Gross margin return on inventory investment = 430000/(250000+180000)/2= 200% Option A is correct 2 Cycle efficiency is the ratio of value-added manufacturing time to the total of both value and non-value-added manufacturing times Option C is correct
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