Inventory Ratios

Inventory Ratios - Inventories Problem #1 FIFO Inventory...

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Inventories Problem #1 FIFO LIFO Inventory Inventory BB 5,000 BB 5,000 400 1,000 2/1 400 1,000 2/1 0 100 3/1 3,000 3/1 3,000 100 4,000 4/1 0 3,000 4/1 1,500 4/1 3,000 4/1 8,000 6,500 8,000 7,000 1,500 1,000 Sales 29,000 Sales 29,000 Cost of Goods Sold 6,500 Cost of Goods Sold 7,000 Gross Margin 22,500 Gross Margin 22,000 500@$10 500@$10 100@$10 100@$10 200@ $15 200@ $15 400@$10 200@$15 100@$15 300@$10
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FIFO LIFO Inventory Inventory BB 5,000 BB 5,000 400 1,000 2/1 400 1,000 2/1 0 100 3/1 3,000 3/1 3,000 100 4,000 4/1 0 3,000 4/1 1,500 4/1 3,000 4/1 8,000 6,500 8,000 7,000 1,500 1,000 Sales 29,000 Sales 29,000 Cost of Goods Sold 6,500 Cost of Goods Sold 7,000 Gross Margin 22,500 Gross Margin 22,000 Inventory Turnover = Cost of Goods Sold / Average Inventory = # times Average Days' Sales in Inventory = 365 / Inventory Turn = # days Inventory Turnover 6,500/((5,000 + 1,500)/2) = 2.0000 times 7,000/((5,000 + 1,000)/2) = 2.3333 times Average Days' Sales in Inventory 365/2.0000 =
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Inventory Ratios - Inventories Problem #1 FIFO Inventory...

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