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Cost and management accounting (mgt 402).........Start date : 12 may 2016.........End date : 18 may 2016 )...Marks 10

Cost & Management Accounting (MGT402)

GDB # 01

Total Marks: 10

Case:

Following are the inventory turnover ratios of Global Company, Cosmos Company, SunStar Company and Galaxy Company for the financial year 2010, 2011 and 2012. SunStar and Galaxy Company manufacture heavy machinery whereas Global and Cosmos Company are retailers of general merchandise.

Company

FY-2010

FY-2011

FY-2012

Global Co.

?

6.78

6.81

Cosmos Co.

11.34

10.97

10.74

SunStar Co.

1.83

1.59

1.9

Galaxy Co.

3.97

3.78

4.12

 

 

Financial information of Global Company for financial year 2010 is as follows:

  • Opening inventories-----------------Rs.  30,000
  • Closing inventories------------------Rs.  41,000
  • Cost of goods manufactured-------Rs. 261,000

Required:

  1. In general, higher inventory turnover ratio indicates efficient operations carried out by an organization but a very high ratio is not considered good. Why is it so?                                                        
  2. Calculate the missing figure for inventory turnover ratio of Global Company for year 2010 with the help of given data?                                                                                                  
  3. Can we compare inventory turnover ratio of Global Company with that of SunStar and Galaxy Company? Justify your answer with logical argument.                       


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Views: 5034

Replies to This Discussion

A high inventory turnover ratio mean the company has had unexpectedly strong sales -- a good sign. Or it could mean the firm is not managing its buying as well as it might and is having difficulty in administering its inventory

bint e ahmed ye meri wali thek nahi hay kya is main kya mistake hay please mujy clea ker do ap sub

This info might be helpful for GDB. Cost of good manufactured given ha , opening and closing inventories given hain, Is say hum cost of goods sold nikal sakty jo inventory turn over ratio formula ki requirement ha.

Cost of goods manufactured
+ opening finished goods inventory
-closing finished goods inventory
= cost of goods sold

Total factory cost

+ opening work in process inventory
-closing work in process
= cost of goods manufactured.

yes now u r right cost of good sold aisey hi niklay ga 

can use this formula to find "
Beginning inventory + Purchases - Ending inventory = Cost of goods sold

Cost of Good Manufactured + Opening Inventory – Closing Inventory = Cost of Good Sold

Dear Students Don’t wait for solution post your problems here and discuss ... after discussion a perfect solution will come in a result. So, Start it now, replies here give your comments according to your knowledge and understandings....

MGT402 GDB#01 CLOSING DATE 18 MAY 2016 By Abid Mehmood 

I think that Cost of Goods manufactured will be subtract from closing inventory amount however in case of Cost of Goods Sold there will no plus of minus of closing inventory amount. Please discuss and clear my idea

Opening inventory + cost of goods manufactured - closing inventory = cost of goods sold.
it is right .

please clarify something about the part a and c

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