P6_L07_InventoryCost - OM 335 Fall 2008

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Unformatted text preview: OM 335 Fall 2008 b8b6708c1e77787f0d3d5a581f2ead761e2c6796.doc P6: Inventory Cost A manufacturing company producing medical devices reported $60,000,000 in sales over the last year. At the end of the same year, the company had $20,000,000 worth of inventory of ready-to-ship devices. a) Assuming that units in inventory are valued (based on COGS) at $1,000 per unit and are sold for with 100% markup, how fast does the company turn its inventory? The company used a 25 percent per year cost of inventory. That is, for the hypothetical case that one unit of $1,000 would sit exactly one year in inventory, the company charges its operations division a$250 inventory cost. b) The company used a 25 percent per year cost of inventory. That is, for the hypothetical case that one unit of $1,000 would sit exactly one year in inventory, the company charges its operations division a...
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This note was uploaded on 10/16/2011 for the course OM 335 taught by Professor Jonnalagedda during the Fall '08 term at University of Texas at Austin.

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P6_L07_InventoryCost - OM 335 Fall 2008

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