Question

Akers Inc. maintains an average inventory of $1,150,000 (at cost). Last year, Akers' sales volume was $11,500,000 and cost of goods sold was $5,290,000. Akers has determined that its inventory carrying cost is 15 percent annually. a. What was the inventory turnover rate? (Round your answer to 1 decimal place.) Inventory turnover rate times b. How much was the inventory carrying cost for the year? Inventory carrying cost
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Answer 1

Inventory turnover ratio is nothing but the ratio that measures the number of times inventory is sold or used in a given time period and is calculated by dividing net sales by average inventory.

Economic Order Quantity is the number of unit that is added to the inventory which minimize the total inventory cost. It maintain a balance between ordering costs and carrying costs.

Aug. inventory = $15 $ 1,150 000 cost of goods bold = $5,290,000 Salis = $ 11,500,000 HE 15% of cost Inventory turnouer - Cost of goods sold Aug. inventory $5290.000 - $1150,000 = 14 6 times Auswere be inventory carrying cast 160 x Carrying cost (H) - 15 x 5290,000 = 18793500 Answer 100

d = 40 bottles werk cast = 99/bottle S = $50 H = 209 100 = $1.8/unit/year n = 52 weeks D = dxn = 408 52 = 2080 units /year Q: E09 - 2DS 2 x 2080 X 50 1.8 = 339.93 or [340 units / Answear b. Avg inventory - e = 340 2 = 170 units govertory tonoven : D Aug. inventory 2080 v 170 12.24 times per Auswer year