Inventory Costs plays a major role in ascertaining working capital requirements as well structuring cash flow statement.
Explanation:
In the given example,
inventory cost 40 percent
Inventory Value $400 million
Ratio of inventory cos ts to inventory value = Inventory Cost / Inventory Value
.
so in the current case it will be 40% x/$400 million
Hence, Inventory Cost 160 Million
Since the cost is fairly on a higher side at 40$ it should try to reduce it which will help in improving its bottom-line.
Company should focus on offering on discounts and promotions and reduce Obsolete Stock.
It should work on restructuring and organizing warehouse costs by prioritizing inventory based on their movements.
The procurement team should order in minimum quantities and benchmark reorder point.
Team
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Answer:
1.Allocated cost
Land 150,000
Building 250,000
Furniture 100,000
Total 500,000
2.Net income cash flow -500,000 IA
Explanation:
1.
Allocated cost
Land =500,000*180,000/600,000=150,000
Building =500,000*300,000/600,000=250,000
Furniture =500,000*120,000/600,000=100,000
Allocated cost
Land 150,000
Building 250,000
Furniture 100,000
Total 500,000
2.
Cash -500,000
Land 150,000
Building 250,000
Furniture 100,000
Net income cash flow -500,000 IA
Answer:
b. Each franchise outlet is probably a carbon copy of every other outlet.
Explanation:
A franchise business is an arrangement where a popular business owner (franchisor) allows a third party ( franchisee)to start and run an independent outlet similar to the franchisor business. The franchisor licenses the franchisee to use their
- Brand name and colors,
- Marketing materials,
- Operating systems and design layouts
- Operating processes and procedures
A franchisee sells similar products at the same price as the franchisor. The franchise outlets have similar looks because of branding, colors, and layout.
Answer:
$38,265
Explanation:
Beg RE = $29,825
Plus Net Income = $6,540
Minus Dividends = ($2550)
Plus New Stock = $4450
Ending RE = $38,265
