Question

The McDonald’s fast-food restaurant on campus sells an average of 7,200 quarter-pound hamburgers each week. Hamburger patties are resupplied twice a week, and on average the store has 795 pounds of hamburger in stock. Assume that the hamburger patties cost $4 a pound and there are 52 weeks in a year. a. What is the inventory turnover for the hamburger patties?

Answer 1

Answer:

The inventory turnover for the hamburger patties is 470.95 times

Explanation:

The computation of the inventory turnover is shown below

Inventory turnover ratio = (Cost of goods sold) ÷ (average inventory)

where,

Cost of goods sold =  Number of hamburgers each week × cost per hamburger × total number of weeks in a year

= 1,800 × $4 × 52 weeks

= $374,400

Number of hamburgers each week = Average quarter hamburger pound ÷ number of quarters in a year÷

= 7,200 ÷ 4 quarters

= 1,800

And, the average stock is 795 pounds

Now put the values to the above formula

So, the value would be equal to

= $374,400 ÷ 795

= 470.95 times