The following information pertains to two competitors, Superior Inc. and Michigan Corp. Company Beginning Invento...
The following information pertains to two competitors, Superior Inc. and Michigan Corp.
|
Company |
Beginning Inventory |
Ending Inventory |
Cost of Goods Sold |
|||
|
Superior Inc. |
$183,000 | $146,000 | $1,230,719 | |||
|
Michigan Corp. |
$394,000 | $453,000 | $2,280,825 |
Superior Inc. reported sales revenues of $1,613,000, and Michigan
Corp. reported sales revenue of $3,379,000.
Calculate the inventory turnover ratio for Superior and Michigan. (Round answers to 1 decimal place, e.g. 10.5.)
| Superior Inc. | Michigan Corp. | |||
|---|---|---|---|---|
|
Inventory turnover ratio |
Enter ratio rounded to 1 decimal place. times | Enter ratio rounded to 1 decimal place. times |
Calculate the gross margin and gross margin ratio for Superior and Michigan. (Round gross margin ratio to 1 decimal place, e.g. 10.5%.)
| Superior Inc. | Michigan Corp. | |||||
|---|---|---|---|---|---|---|
|
Gross margin |
$Enter a dollar amount. | $Enter a dollar amount. | ||||
|
Gross margin ratio |
Enter percentage rounded to 1 decimal place. | % | Enter percentage rounded to 1 decimal place. | % | ||
On the basis of inventory turnover, which company is moving its inventory faster?
| Select company name. moves its inventory faster. |
Homework Answers
| Superior Inc. | Michigan Corp. | |
| Inventory turnover ratio | 7.5 times | 5.4 times |
Working:
Inventory turnover ratio = Cost of goods sold/Average inventory
| Superior Inc. | Michigan Corp. | |
| Cost of goods sold (a) | 1230719 | 2280825 |
| Beginning inventory | 183000 | 394000 |
| Ending inventory | 146000 | 453000 |
| 329000 | 847000 | |
| Average inventory (b) | 164500 | 423500 |
| Inventory turnover ratio (a)/(b) | 7.48 | 5.39 |
| Superior Inc. | Michigan Corp. | |
| Gross margin | $ 382,281 | $ 1,098,175 |
| Gross margin ratio | 23.7% | 32.5% |
Working:
| Superior Inc. | Michigan Corp. | |
| Sales revenues (a) | 1613000 | 3379000 |
| Less: Cost of goods sold | 1230719 | 2280825 |
| Gross margin (b) | 382281 | 1098175 |
| Gross margin ratio (b)/(a) | 23.7% | 32.5% |
Superior Inc. is moving its inventory faster.
Add Answer to:
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