Question

Topeka Manufacturing reported sales of $750,000 during the current year. The company used $300,000 of raw materials to produce the units that were sold. Its raw materials inventory totaled $10,000 at the beginning of the year and $14,000 at the end of the year. What is the company’s days’ sales in raw materials inventory at the end of the current year?

Answer 1

Days sales in raw materials inventory = 17.03 days

Step-by-step explanation:

Given that;

Sales = $750,000

Raw materials used = $300,000

Ending raw materials inventory = $14,000

Beginning inventory = $10,000

Days sales in raw materials inventory =

Ending raw materials inventory ÷ raw materials used × 365

= ($14,000 ÷ $300,000) × 365

= 17.03 days