SUPERVALU reported the following data in its annual report. Compute SUPERVALU\'s
ID: 2486855 • Letter: S
Question
SUPERVALU reported the following data in its annual report. Compute SUPERVALU's inventory turnovers for 2011 and 2012, using: Cost of sales and LIFO inventory. Cost of sales and FIFO inventory. Some firms calculate inventory turnover using sales rather than cost of goods sold in the numerator. Calculate SUPERVALU'S 2011 and 2012 turnover, using: Sales and LIFO inventory. Sales and FIFO inventory. Describe the method that SUPERVALU'S appears to use. State which method you would choose to evaluate SUPERVALU'S performance. Justify your choice.Explanation / Answer
1.
Inventory turnovers = cost of goods sold / average inventory
Average inventory = (Beginning inventory + ending inventory ) /2
Inventories turnover LIFO For 2011 = 29,124 / (2342+2270)/2 = 12.63 times
Inventories turnover LIFO for 2012= 28,010 / (2150+ 2270)/2 = 12.67 times
Inventories turnover FIFO For 2011 = 29,124 / (2606+2552)/2 = 11.29 times
Inventories turnover FIFO for 2012= 28,010 / (2552+2492)/2 = 11.11 times
2.
Inventories turnover = sales / inventory
Inventories turnover LIFO For 2011 = 29,124 / 2270 = 12.83 times
Inventories turnover LIFO for 2012= 28,010 / 2150 = 13.03 times
Inventories turnover FIFO For 2011 = 29,124 / 2552= 11.41 times
Inventories turnover FIFO for 2012= 28,010 / 2,492 = 11.24 times
3.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.