Respuesta :
Answer:
2020
Inventory TO 2.2
Days on Inventory 166
Gross profit margin: 42.8%
2021
Inventory TO 2.1
Days on Inventory 174
Gross profit margin: 35.6%
Explanation:
Inventory $570,000 $580,000 $330,000
Net sales 1,875,000 1,750,000 1,350,000
Cost of goods sold 1,207,500 1,001,000 939,000
2020:
[tex]\frac{COGS }{Average Inventory} = $Inventory Turnover[/tex]
where:
[tex]$Average Inventory=(Beginning Inventory + Ending Inventory)/2[/tex]
COGS 1,001,000
beginning 330,000
ending 580,000
[tex]$Average Inventory=330000 + 580000)/2[/tex]
Inventory 455000
[tex]\frac{1001000}{455000} = $Inventory Turnover[/tex]
Inventory TO 2.2
[tex]\frac{365}{Inventory TO} = $Days on Inventory[/tex]
[tex]\frac{365}{2.2} = $Days on Inventory[/tex]
Days on Inventory 166
Gross profit margin:
sales less COGS divided over sales:
(1,750,000 - 1,001,000) / 1,750,000 = 0.428 = 42.8
2021
[tex]\frac{COGS}{Average Inventory} = $Inventory Turnover[/tex]
where:
[tex]$Average Inventory=(Beginning Inventory + Ending Inventory)/2[/tex]
COGS 1,207,500
beginning 580,000
ending 570,000
[tex]$Average Inventory=580000 + 570000)/2[/tex]
Inventory 575000
[tex]\frac{1207500}{575000} = $Inventory Turnover[/tex]
Inventory TO 2.1
[tex]\frac{365}{Inventory TO} = $Days on Inventory[/tex]
[tex]\frac{365}{2.1} = $Days on Inventory[/tex]
Days on Inventory 174
Gross profit margin:
sales less COGS divided over sales:
(1,875,000 - 1,207,500) / 1,875,000 = 0,356 = 35.6%