ACCT 346 Week 3 Threaded Discussion - Inventory Sales & Income

ACCT 346 Week 3 Threaded Discussion - Inventory Sales & Income

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The division manager commends you on your successful improvement to inventory turnover by reducing ending inventory by 20%. He noticed, however, that even though sales are up 19% over last year, income was down by 14%. He is very anxious to hear your explanation - use 2 postings. - POST #1 The aim here was to get us back on our normal revenue and growth track. So far we have had a good result in that the inventory went down 20%. We were facing even larger costs because this entire inventory represented money tied up, storage costs, etc. I’m sure you can see how the more inventory we kept on hand, the less liquid we became. I had hoped to at least make enough income from these sales to cover our fixed and variable costs, and I saw no other option but to heavily discount goods even if it meant cutting into our margin. This year we have been hit hard by the poor economy… there has been a significant slowdown in retail sales and consumption. I thought I could take a short-term approach to
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This note was uploaded on 05/27/2011 for the course ACCOUNTING 346 taught by Professor Glenn during the Spring '11 term at DeVry NY.

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ACCT 346 Week 3 Threaded Discussion - Inventory Sales & Income

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