Question

Sapphire Aerospace operates 52 weeks per year, and its cost of goods sold last year was $6,500,000. The firm carries eight items in inventory: four raw materials, two work-in-process items, and two finished goods. Table 12.3 shows last year’s average inventory levels for these items, along with their unit values. a. What is the average aggregate inventory value? b. How many weeks of supply does the firm have? c. What was the inventory turnover last year?

Answer 1

a. The average aggregate inventory value is $336,000.

b. The number of weeks of supply that the firm has is 3 weeks, approximately (2.69 ($336,000/$6,500,000 x 52).

c. The inventory turnover of Sapphire Aerospace for last year was 19.3x.

Question Completion:

Category        Part Number        Average           Value        Total      Category

                                              Inventory Units    per Unit      Value        Totals

Raw Materials      RM-1                20,000               $1        $20,000

Materials             RM-2                 5,000                 5          25,000

                            RM-3                 3,000                 6           18,000

                            RM-4                  1,000                 8            8,000      $71,000

Work-in-process WIP-1                 6,000                10         60,000

                            WIP-2               8,000                 12         96,000   $156,000

Finished goods   FG-1                  1,000                65         65,000

                            FG-2                   500                88         44,000   $109,000

Total value of inventory                                               $336,000  $336,000

Inventory turnover = Cost of goods sold/Average inventory

= 19.3x ($6,500,000/$336,000)

Thus, the average inventory value is $336,000, while the inventory turnover was 19.3x.

Learn more about inventory turnover here: brainly.com/question/5701250