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4 years ago

The following data were extracted from the income statement of Saleh Inc.:

Business

1 answer:

rjkz [21]4 years ago

3 0

Answer:

1. Inventory turnover ratio for current year = $6,375,000 ÷ $850,000 = 7.5

Inventory turnover ratio for previous year = $7,380,000 ÷ $820,000 = 9.0

2. Days' sales in inventory for current year = 365 ÷ 7.5 = 48.6 days

Days' sales in inventory for current year = 365 ÷ 9.0 = 40.5 days

Explanation:

1. The formula of inventory turnover ratio is shown below:

= Cost of goods sold ÷ average inventory

where,

average inventory = (opening inventory + ending inventory) ÷ 2

For current year = ($840,000 + $860,000) ÷ 2 = $850,000

For previous year = ($800,000 + $840,000) ÷ 2 = $820,000

And, the cost of goods for current year is $6,375,000

For previous year it is $7,380,000

So,

Inventory turnover ratio for current year = $6,375,000 ÷ $850,000 = 7.5

Inventory turnover ratio for previous year = $7,380,000 ÷ $820,000 = 9.0

2. The formula to compute number of days' sales in inventory is shown below:

= Number of days ÷ inventory turnover ratio

given that, number of days = 365

So,

Days' sales in inventory for current year = 365 ÷ 7.5 = 48.6 days

Days' sales in inventory for current year = 365 ÷ 9.0 = 40.5 days

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3 years ago

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Answer:

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3 years ago

Peter's Pencils is a perfectly competitive company producing pencils. Suppose Peter is producing 1,000 pencils an hour. If the t

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Answer:

Peter is maximizing his profit and is making an economic profit.

Explanation:

Peter's Pencils is a pencil producing firm in a perfectly competitive firm.

It produces 1,000 pencils an hour.

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The market price of each pencil is $2.

The marginal cost of producing the last unit of a pencil at this point is $2.

An individual firm in a perfectly competitive market faces a horizontal line demand curve which also represents the average revenue and marginal revenue.

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The marginal revenue is equal to marginal cost, this implies that the firm is maximizing profits.

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3 years ago

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4 years ago

Green design, sustainable packaging, waste management, and energy efficiency are aspects of the _________

Nastasia [14]

Green design, sustainable packaging, waste management, and energy efficiency are aspects of the technological segment of the general environment.

<h3>What is technological segment of the general environment?</h3>

The practice of creating physical items, the built environment, and services in accordance with ecological sustainability principles is known as "green design."

The creation and use of packaging that improves sustainability is referred to as sustainable packing. This entails a greater reliance on life cycle assessment (LCA) and life cycle inventory (LCI) to assist direct the use of packaging that has a smaller negative impact on the environment.

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Hence, Green design, sustainable packaging, waste management, and energy efficiency are aspects of the technological segment of the general environment.

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