JJ Inc. is a manufacturing company with annual turns of 6 and Anual Cost of Good
ID: 343612 • Letter: J
Question
JJ Inc. is a manufacturing company with annual turns of 6 and Anual Cost of Goods Sold (COGS) is $48 million. Assume a year has 50 weeks.
(Round your answers to 2 decimal places.)
What is the average inventory JJ Inc. holds?
What is the Weeks-of-Supply ?
JJ Inc. is a manufacturing company with annual turns of 6 and Anual Cost of Goods Sold (COGS) is $48 million. Assume a year has 50 weeks.
(Round your answers to 2 decimal places.)
What is the average inventory JJ Inc. holds?
What is the Weeks-of-Supply ?
Explanation / Answer
Ans) a) Average Inventory = Cost of Goods sold / Annual turns
= $ 48 million / 6
= $ 8 Million
b) Average weekly sale = Annual sales at cost (COGS) / No. of weeks
= $ 48 million / 50
= $ 960000
Weeks of supply = Average Inventory / Average weekly sale
= $ 8 million / $ 960000
= 8.33 weeks
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