4Screen 16Screen Custom View co oncomhmtpx Question 11 of 14

4-Screen 16-Screen Custom View .co on.com/hm.tpx Question 11 (of 14) Save&Exit; Subm 10.00 points Problem 7-1 Akers Inc maintains average inventory of $1.450,000 (at cost). Last year, Akers sales volume was $14,500 000 and cost of goods sold was $8,990,000. Akers has determined that its inventory carrying cost is 20 percent a. What was the inventory tumover rate? b. How much was the inventory carrying cost for the yeart? /2018 tab caps ock

Solution

A.

Inventory turnover rate = Cost of goods sold / average inventory

Inventory turnover rate = 8990000/1450000 = 6.2 times

B.

Inventory carrying cost = average inventory*holding cost percentage

Inventory carrying cost = 1450000*20%

Inventory carrying cost = $290000