Question

Using the information below, compute the raw materials inventory turnover :

Raw Materials Used: $ 121,600
Begining Raw Materials Inventory: $18000
Ending Raw Materials Inventory: $ 20200

Answer 1

The raw materials inventory turnover is approximately 6.37.

Step-by-step explanation:

Raw Materials Inventory Turnover

The formula for calculating the raw materials inventory turnover is:

Raw Materials Inventory Turnover = Raw Materials Used / Average Raw Materials Inventory

To calculate the average raw materials inventory, we need to find the average of the beginning and ending raw materials inventory. In this case:

Beginning Raw Materials Inventory = $18,000

Ending Raw Materials Inventory = $20,200

The average raw materials inventory = (Beginning Raw Materials Inventory + Ending Raw Materials Inventory) / 2 = ($18,000 + $20,200) / 2 = $19,100

Now, substitute the values into the formula:

Raw Materials Inventory Turnover = $121,600 / $19,100 = 6.37

Therefore, the raw materials inventory turnover is approximately 6.37.