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ahrayia [7]
3 years ago
12

A company with current-year sales of $4,500,000 and cost of goods sold of $3,248,000 reduced its inventory days from 119 days in

the prior year to 115 days for the current year. Its receivable days slowed from 40 days to 43 days. What was the cash flow effect of these swing-factor efficiency changes
Business
1 answer:
Alina [70]3 years ago
7 0

Answer:

($1391.78)

Explanation:

According to the problem, computation of the given data are as follows,

Sales = $4,500,000  

COG sold = $3,248,000

First we calculate the amount receivable in both 40 and 43 days, then

Amount Receivable = Sale ( Receivable days ÷ 365)

Amount Receivable (40 days) = $4,500,000 ( 40 ÷ 365) = $493,150.68

Amount Receivable (43 days) = $4,500,000 ( 43 ÷ 365) = $530,136.99

So, change in receivables = $530,136.99 - $493,150.68

= $36,986.30

Now we calculate the inventory for both 119 and 115 days

Inventory = COG Sold ( Inventory Days ÷ 365)

Inventory (119 Days) = $3,248,000 ( 119 ÷ 365) = $1,058,936.99

Inventory (115 Days) = $3,248,000 ( 115 ÷ 365) = $1,023,342.47

So, change in inventory = $1,058,936.99-$1,023,342.47

= $35,594.51

So, we can calculate the cashflow effect by using following formula,

Cashflow change = Change in inventory - Change in receivables

By putting the value, we get

Cashflow change = $35,594.51 - $36,986.30

=  ($1391.78) (Bracket denotes negative)

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murzikaleks [220]

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Explanation:

1b. Managerial Accountants can improve the supply chain by looking out for hitches in the distribution cycle of goods and being proactive about handling them. Some measures to achieve these are;

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4. Distribution Strategies - A clear cut map should be put in place by the management to facilitate an efficient and prompt delivery system. This can be done by strengthening all departments involved in distribution.

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I would invest in a company that discloses their sustainable practices, first, because I believe they are transparent, and secondly because I believe that such companies aim at being enduring companies which are evolving and living up to the demands of a cleaner earth.

7 0
3 years ago
Which of the following is not one of the four main types of inventory?
Maslowich

Answer:

All of these are main types of inventor.

7 0
2 years ago
The following data relating to direct materials cost for October of the current year are taken from the records of Good Clean Fu
Dima020 [189]

Answer:

standard price= $5

Explanation:

Giving the following information:

Quantity of direct materials used 3,000 lbs. Actual unit price of direct materials $5.50 per lb. Units of finished product manufactured 1,400 units Standard direct materials per unit of finished product 2 lbs.Direct materials quantity variance-unfavorable $1,000Direct materials price variance-unfavorable $1,500.

Direct material price variance= (standard price - actual price)*actual quantity

-1,500= (SP - 5.5)*3,000

15,000=3,000SP

5= standard price

Direct material quantity variance= (standard quantity - actual quantity)*standard price

Direct material quantity variance= (1400*2 - 3,000)*5

Direct material quantity variance= 1,000 unfavorable

5 0
3 years ago
In the New Economy, people are most rewarded through education and intellectual growth when they spend years studying a broad ar
aliya0001 [1]

Answer:

False

Explanation:

The formal education setting has not been changing at the same rate with the daily changes in <em>business</em>, <em>technology</em> and other <em>socio-economic </em>elements.Therefore people who spend years studying a broad array of subjects in formal educational settings are less likely to be rewarded through education and intellectual growth.

7 0
3 years ago
The Bawl Corporation supplies alloy ball bearings to auto manufacturers in Detroit. Because of its specialized manufacturing pro
borishaifa [10]

Answer:

a. The Weeks of supply is 5.67 week

b. The Inventory turns is 9.167

Explanation:

a. In order to calculate the weeks of supply we would have to use the following formula:

Weeks of Supply = Average Aggregate Inventory Value/Weekly Sales

Average Aggregate Inventory Value = Raw Materials + WIP + Finished Goods = $2,470,000+ $1,566,000 + $1,200,000 = 5,236,000

Sales Per Week = COGS/52 weeks per year = $48,000,000/52 = $923,076

Weeks of Supply = Average Aggregate Inventory Value/Weekly Sales = $5,236,000/$923,076 = 5.67 or 5.7 week

b Inventory Turnover = Annual Sales/Average Aggregate Inventory Value = 48000000/5236000 = 9.167 or 9.17

4 0
3 years ago
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