Question

Using the information below, compute the raw materials inventory turnover:

Answer 1

Answer:

C. 10.06.

Explanation:

* Assuming 8,000 and 9,000 is given in dollar terms rahter than a units.

Average raw material Inventory = ( Beginning raw materials inventory + Ending raw materials inventory ) / 2

Average raw material Inventory =  ( 8,000 + 9,000) / 2

Average raw material Inventory = 8,500

Raw Material Inventory Turnover = Raw material Inventory used / Average raw material Inventory

Raw Material Inventory Turnover = $85,500 / 8,500

Raw Material Inventory Turnover = 10.06

Answer 2

Answer:

C. 10.06

Explanation:

Raw materials inventory turnover is the ratio of the cost of raw material used to the average raw material for the period.

Given;

Raw materials used  = $85,500

Beginning raw materials inventory 8,000

Ending raw materials inventory 9,000

Raw materials inventory turnover = $85,500/($8,000  + $9,000)/2

= $85,500 × 2/$17000

= 10.05882353