5 questions

The following information is the end-of-year data for Pecos Yo Company:

Compute the following:

Round your answers to one decimal place.

1. Inventory turnover for raw materials inventory.
    
   
   
2. Days in raw materials inventory (Assume 360 days in a year.).
    
   
   
3. Inventory turnover for work-in-process inventory.
    
   
   
4. Days in work-in-process inventory (Assume 360 days in a year.).
    
   
   
5. Inventory turnover for finished goods inventory. 
    
   
   
6. Days in finished goods inventory (Assume 360 days in a year.)
    

The following information is for Bun MaScare Company:

Assuming 365 days in a year, compute the following. (Note: Preparing a cost of goods manufactured schedule and a costs of goods sold schedule may be helpful in solving the problem.) Round your answers to one decimal place.

1. Inventory turnover for raw materials
   
   
   
2. Days in ending raw materials inventory
   
   
   
3. Inventory turnover for work in process
   
   
   
4. Days in ending work-in-process inventory
   
   
   
5. Inventory turnover for finished goods
   
   
   
6. Days in ending finished goods inventory
   
   
   
7. What conclusions can you draw from your inventory turnover calculations?

Ride EZ and Happy Trails are mountain bike retailers. This season a new bike, the Coaster, was introduced in the market. It was believed that the Coaster would be the most popular mountain bike sold during the season. Both companies sold the bike at the suggested retail price. At the end of each month during the season (May through September), store managers made notes of how many bikes were sold or purchased during the month. The following is a list of these notes:

The following information is also known:

• Suggested retail price is $600.
• The manufacturer sells the Coaster for a normal price of $275.
• Discounts of $25 off the normal price are given on purchases of 100 bikes or more.
• Average overhead costs used to purchase and initiate a purchase order for both retailers are $450 per event.
• Purchases are always made on the last day of the month.
• On June 15, the manufacturer raised the price of the Coaster to $290.
• Average inventory overhead costs for both retailers are $15 per unit per month.
• Both Ride EZ and Happy Trails account for inventory using FIFO.

Watersports, Inc., sells high-performance water skis. Because its sales are seasonal, Watersports calculates and uses different reorder points for summer and winter months. The following information is available:

The water skis cost $150 each, and Watersports sells them to its customers for $300. Watersports' supplier charges $500 for each order placed. Watersports incurs an annual carrying cost of $17 per set of skis. Watersports has noticed in the past that sometimes the deliveries can be up to two days later than average and that the customer demand can be as much as 1,800 skis during April through October and 500 skis during the rest of the year.

Assume 30 days for each month. Round your answers to the nearest whole number.

1. Calculate the appropriate economic order quantities for the two seasons. 
   

   April - October
   November - March

   
   
   
2. Calculate the safety stock for the two seasons that is necessary to accommodate potential delays in inventory deliveries and potential spikes in sales demand.
   

   April - October
   November - March

   
   
   
3. Calculate the reorder point (with safety stock) for the two seasons.
   

   April - October
   November - March

   
   
   
4. Describe the value and the cost of having safety stock.

Widgits-R-Us specializes in building gears that go into large windmills and clocks. The company has had the following sales and production costs for the last four years.

Round your answers to the nearest whole number. If an amount is zero, enter "0".

1. Compute operating incomes using variable and absorption costing and FIFO periodic inventory flows.
   
2. Compute operating incomes using variable and absorption costing and LIFO periodic inventory flows. Round your answers to the nearest dollar.
   
3. Reconcile the change in operating income over the four years using variable vs. absorption costing.
   
   Operating income, variable costing with FIFO
   
   
   Operating income, variable costing with LIFO
   
   
   Operating income, absorption costing with FIFO
   
   
   Operating income, absorption costing with LIFO