Using the information provided, what is the length of the production cycle for the firm?
Perfect Purchase Electronics
Selected Income Statement Items, 2014
Cash Sales $1,500,000
Credit Sales $7,500,000
Total Sales $9,000,000
COGS $6,000,000
Perfect Purchase Electronics
Selected Balance Sheet Accounts
12/31/2014 12/31/2013 Change
Accounts Receivable $270,000 $240,000 $30,000
Inventory $125,000 $100,000 $25,000
Accounts Payable $110,000 $90,000 $20,000
A) 6.08 days
B) 7.60 days
C) 53.33 days
D) 6.84 days
Answer: D
Explanation: D)
1. Calculate the average inventory for the year:
Average inventory =
=
= $112,500
2. Calculate the inventory turnover:
Inventory turnover =
=
= 53.33 times.
3. Estimate the average production cycle:
Production cycle =
=
= 6.84 days.
You might also like to view...
A pricing system in which there is a "fixed" fee and then a variable "usage" fee is called bundling
Indicate whether the statement is true or false
Consider the following hypothesis test:H0: ?
14Ha: ?< 14A sample of 64 provides a sample mean of 13 and a sample standard deviation of 4.
a.Determine the standard error of the mean.b.Compute the value of the test statistic.c.Determine the p-value; and using ? = .05, test the above hypotheses.
What will be an ideal response?
Adam decided to play a practical joke on Linda, a coworker. As Linda was leaving the office one night, Adam, wearing a mask, stepped out from behind some bushes. He pointed a handgun made out of licorice at her and demanded her purse. He then pushed the candy gun to her head and told her if she told anybody he'd kill her. Linda was very scared during the whole incident. She did not think it was funny when Adam pulled the mask off and took a bite out of the gun as he gave her the purse back. Which statement is correct?
A. Adam committed an assault but not a battery. B. Adam committed a battery but not an assault. C. Adam committed an assault and a battery. D. Adam committed neither an assault nor a battery since he used a candy gun and was only playing a joke on Linda.
A portfolio has three stocks — 110 shares of Yahoo (YHOO), 210 Shares of General Motors (GM), and 70 shares of Standard and Poor's Index Fund (SPY)
If the price of YHOO is $20, the price of GM is $20, and the price of SPY is $130, calculate the portfolio weight of YHOO and GM. A) 10.6%, 13.5% B) 9.9%, 25.7% C) 13.5%, 24.4% D) 14.2%, 27.1%