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lapo4ka [179]
3 years ago
6

Your firm's last three years of sales have been $1 million, $2 million, and $3 million (oldest to most recent). Year-end invento

ry was $250k, $500k, and $750k respectively. You are considering purchasing an inventory system that will double your inventory turnover. Which of the following is a good estimate for the amount you'll save with regard to inventory investment next year, assuming your sales will be $4 million - i.e., what's the difference between your estimates of inventory with the system and without? (Assume that your costs of goods sold stay at a constant percentage of sales throughout the past three years and next year; use same-year CoGS/Inv as your inventory turnover formula.)
Business
1 answer:
Nitella [24]3 years ago
6 0

Answer:

we will save 500,000 dollars worth of inventory.

Explanation:

If sales are 4,000,000 then the expected inventory will be 1,000,000

Giving an inventory turnover of:

4,000,000 / 1,000,000 = 4

IF we double the inventory turnover then:

4,000,000/inventory = 8

So the inventory will be of: 4,000,000/8 = 500,000

the difference is for 500,000

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Answer:

Explanation:

The preparation of the production budget report in units for Pasadena Candle Inc. is shown below:

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Less: Estimated January 1 inventory                        -$1,900

Units produced                                                          $39,100

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If a $4,000 debit to Equipment in a journal entry is incorrectly posted to the ledger as a $4,000 credit and the ledger account
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The totals of Trial balance have a difference of $8,000. The credit balance totals of Trial balance is higher than the debit totals because the original entry of debit is mission and there is an wrong posing on the credit side which reduce the debit balance by $4,000 and Increase the credit balance by $4,000 at the same time. Net effect will be $8,000 in totals of trial balance.

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