Question

ity Col x Business Administration - Ivy Tex McGraw-Hill Connect X MO1 Ch 14 Optional Practice X M MHE Reader wewconnect.mheducation.com/flow/connect.html Optional Practice Saved 3M Co. reports beginning raw materials inventory of $930 million and ending raw materials inventory of $880 million. 3M purchased $3,956 million of raw materials and used $4,006 million of raw materials during the year. Compute raw materials inventory turnover and the number of days' sales in raw materials inventory. (Use 365 days per year. Enter your answers in millions.) Choose Numerator: Raw Materials Inventory turnover Choose Denominator: - Average raw materials inventory = Raw materials used Raw Materials Inventory turnover Raw materials inventory turnover

Answer 1

Average raw material inventory

= (Beginning raw material inventory + Ending raw material inventory)/2

= ($ 930 M + $ 880 M)/2 = $ 1,810 M/2 = $ 905 M

Raw material used	/	Average raw material inventory	=	Raw material inventory turnover
$4,006 M	/	$905 M	=	4.43

Ending raw material inventory	/	Raw material used	x	365	Day's sales inventory
$880 M	/	$4,006 M	x	365	80.18