nt accounting statement shows that the inventory investment for raw materials is
ID: 377655 • Letter: N
Question
nt accounting statement shows that the inventory investment for raw materials is Jack Jones, the materials manager at Precision Enterprises, is beginning to look for ways to reduce inventories. A rece s cost of goods sold will be about $23,504,000. Assume that there are 52 business weeks per year $3.84 1,100for workin-process is S7, 189,000. and for frished goods is S2.834 000. This year a. Express total inventory as weeks of supply The weeks of supply isweeks. (Enter your response b. Express total inventory as inventory turns The Inventory tumover is um per year Enter your response rounded to one decimal place rounded to one decimal place.)Explanation / Answer
We know that, the inventory encompasses all the raw materials, Work in Progress & Finished Goods within a supply chain, So,
Total Inventory = 3841100+7189000+2834000 = $13,864,100
COGS = $23,504,000
So, Inventory Turns = COGS/Total Inventory = 23504000/13864100 = 1.7
Therefore, Total Inventory = 1.7 Inventory Turns.
Also, Weeks of Inventory = 52/1.7 = 30.6
Therefore, Total Inventory = 30.6 Weeks of Supply.
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