Compute the inventory turnover each year

Assignment Help Accounting Basics
Reference no: EM131911175

Question - To control operations, Waymor Company makes extensive and exclusive use of financial performance reports for each department. Although all departments have been reporting favorable cost variances in most periods, management is perplexed by the firm's low overall return on investment. You have been asked to look into the matter. Believing the purchasing department is typical of a company's operations, you obtained the following information concerning the purchase of parts for a product it started producing in 2007:

YEAR

PURCHASE PRICE VARIANCE

QUANTITY USED (UNITS)

AVERAGE INVENTORY (UNITS)

2007

1,000 f

20,000

5000

2008

10,000F

30,000

7500

2009

12,000F

35,000

10000

2010

20,000U

25,000

6250

2011

8000F

36,000

9000

2012

9500F

29,000

7250

A. Compute the inventory turnover each year. What conclusions can be drawn from a yearly comparison of the purchase price variance and inventory turnover?

B. Identify problems likely to be caused by evaluating purchasing only on the basis of the purchase price variance.

C. Offer whatever recommendations you believe are appropriate.

Reference no: EM131911175

Questions Cloud

Find the cost of each job using a plantwide rate : The direct labor rate is $50 in both departments. Find the cost of each job using department rates with direct service department cost allocation
Introduction of an electrically powered bike for city : Hank Auto in Tokyo, Japan is considering the introduction of an electrically powered bike for city use. The bike project requires an initial
Immediately after announcement of merger agreement : What would the stock price of Firm B to be immediately after the announcement of the merger agreement?
Write out the entire truth table for the given circuit : Write out the entire truth table for this circuit. State whether, and why, this circuit properly compares a pair of bits to test if they are equal.
Compute the inventory turnover each year : Compute the inventory turnover each year. What conclusions can be drawn from a yearly comparison of the purchase price variance and inventory turnover
Calculate the equivalent annual cost of a new jet : A. Calc ulate the equivalent annual cost of a new jet. B. Calculate the present value of the additional cost of replacing the jet one year earlier than under
What is the current market yield on bond : These bonds have a coupon rate of 6.9 percent and make semiannual coupon payments. What is the current market yield on this bond?
Find the present value at annual effective rate : Afterwards, there are 5 further payments each at the end of the following years at the constant level of 600.
What is the anticipated revenue per hour : Comment on the advantages and disadvantages of using cost based pricing model. What is the anticipated revenue per hour for each service

Reviews

Write a Review

Accounting Basics Questions & Answers

  Anita age 12 is claimed as a dependent by her parents she

anita age 12 is claimed as a dependent by her parents. she earned interest income of 1200 during the year. does she

  Prepare the journal entries to record the stock issuances

Cash and Noncash Issuances Chavoy Corporation was organized on July 1. Prepare journal entries to record the stock issuances on August 1, August 15 and Oct. 15

  Internal control elements vary in their design and

internal control elements vary in their design and application under the manual systems versus the electronic systems.

  Annual report for a publicly held firm

1. Obtain a copy of the 2009 annual report for a publicly held firm. Try to obtain an annual report for a retail or manufacturing firm. Do not use banks or other financial institutions. Be sure that the financial statement contains the following i..

  Problem regarding total overhead variance

Actual overhead for June was $15,800 variable and $9,100 fixed, and standard hours allowed for the product produced in June was 3,000 hours. The total overhead variance is:

  What should be the lowest acceptable transfer price

Division X makes a part that it sells to customers outside of the company. What should be the lowest acceptable transfer price from perspective of Division X

  Spacer company has two service departments and two

spacer company has two service departments and two operating departments. budgeted costs and budgeted activity in the

  Significant role in successful operation of business-society

"Law plays a significant role in the successful operation of business and society" (Bushman, 2007). Law is a natural part of our daily lives; every decision and action we do involves some form of law. Laws aid in regulating society's behavior, it..

  What is the z-score for your company

What is the Z-score for your company in the current and prior years? Explain any yearly differences and whether this indicates stronger or weaker solvency

  Determining balance of retained earnings

In April 2006, ABC Motors had Total Sales of $100,000; Total Expenses of $60,000 and a beginning balance of Retained Earnings of $25,000. The company will pay a $10,000 dividend this month (the dividend was declared this month as well). What is th..

  What are some possibilities for fraud in particular account

What are some possibilities for fraud in this particular account? What are some judgment decisions that the auditor needs to make in this account?

  Total amount of federal and state unemployment tax

Unruh co. which has a taxable payroll of 400,000, is subject to FUTA tax 0f 6.2% and a state contribution rate of 5.4%. however, because of stable employment sxperience, the company's state rate has been reduced to 2%. What is the total amount of ..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd