Question

using the information below, compute the days' sales in raw materials inventory: raw materials used $ 100,500 beginning raw materials inventory 9,500 ending raw materials inventory 12,000

Answer 1

To calculate days' sales in raw materials inventory, we need to find the average daily raw materials used and the average inventory. The number of days in the period is required for an exact calculation.

Step-by-step explanation:

To compute the days' sales in raw materials inventory, we need to calculate the average daily usage of raw materials and then determine how many days the ending inventory will last. The formula for the average daily usage is the total raw materials used divided by the number of days in the period. Unfortunately, without the number of days in the period, we cannot compute the exact days of sales. However, we can provide the formula:

Average Daily Raw Materials Used = Total Raw Materials Used / Number of Days

Days' Sales in Raw Materials Inventory = (Beginning Inventory + Ending Inventory) / 2 / Average Daily Raw Materials Used

Using the provided numbers, if we assume a 365-day year, the average daily raw materials used would be $100,500 / 365 days. The average inventory would be ($9,500 + $12,000) / 2. Then we divide the average inventory by the average daily usage to get the days' sales in raw materials inventory.