Question

Using the Information below, compute the Days' sales in raw materials inventory:

Check my ar
Raw Materials Used $99,500
Beginning Raw Materials Inventory 9,400
Ending Raw Materials Inventory 11,800
Multiple Choice
-10.27.
-38.90.
-9.39.
-10.65.
-43.30.

Answer 1

To find the Days' sales in raw materials inventory, divide the average raw materials inventory by the average daily use of raw materials, resulting in approximately 38.90 days.

Answer is 38.90.

Step-by-step explanation:

The question is asking to calculate the Days' sales in raw materials inventory. To do this, we first need to calculate the average daily raw materials used, which is found by dividing the Raw Materials Used by the number of days in the period (assuming a year, which is 365 days). Then we calculate the average inventory by taking the sum of Beginning Raw Materials Inventory and the Ending Raw Materials Inventory and dividing by two. Finally, the Days' sales in raw materials inventory is calculated by dividing the average inventory by the average daily raw materials used.

Step-by-Step Calculation:

Calculate the average daily raw materials used: Raw Materials Used / 365 days = $99,500 / 365 = $272.60 (approximately).

Calculate the average raw materials inventory: (Beginning Inventory + Ending Inventory) / 2 = ($9,400 + $11,800) / 2 = $10,600.

Now, divide the average inventory by the average daily use: $10,600 / $272.60 = 38.90 (approximately).

Therefore, the Days' sales in raw materials inventory is approximately 38.90 days.