5. The McDonald\'s fast-food restaurant on campus sells an average of 3,200 quar

Question

5. The McDonald's fast-food restaurant on campus sells an average of 3,200 quarter-pound hamburgers each week. Hamburger patties are resupplied twice a week, and on average the store has 540 pounds of hamburger in stock. Assume that the hamburger patties cost $4 a pound and there are 52 weeks in a year. a. What is the inventory turnover for the hamburger patties? (Round your answer to 2 decimal places.) Inventory turnover b. On avetge, how many days of supply are on hand? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Average days of supply per year

Explanation / Answer

a) Inventory turnover per year = (cost of goods sold COGS in a year) / (average inventory value)

COGS = (cost price of 1 pound) x (Pounds of hamburgers sold in a year) = (4) x (3200 x 52/4) = 166400 $

Avg inventory value = (540 pounds)x(4 $ per pound) = 2160 $

Inventory turnover = 16640/2160 = 77.04 per year

b) Average days of supply on hand =(Number of days in a year) / (inventory turnover ratio) = 365/77.04 = 4.74 days

Related Questions

Navigate

• Browse (All)
• Browse 5
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.