Question

Using the information below, compute the days' sales in raw materials inventory: Raw materials used $ 147,600 Beginning raw materials inventory 19,300 Ending raw materials inventory 21,500

Answer 1

Answer:

raw material inventory turnover = 7.24

Explanation:

given,

Raw Materials Used                          = $ 147,600

Beginning Raw Materials Inventory = $19,300

Ending Raw Materials Inventory      =  $ 21,500

the days' sales in raw materials inventory is given by the raw material raw material used divided by the average raw material inventory.

average raw material inventory = $\dfrac{19,300 + 21,500}{2}$

                                                     = $20,400

so,

days' sales in raw materials inventory = $\dfrac{ 147,600}{20,400}$

                                                               = 7.24

hence,

raw material inventory turnover = 7.24