Problem: The following data are taken from Clayburgh Corporation's records for the years ended December 31, 2011, 2010 and 2009.
| |
2011 |
2010 |
2009 |
| Finished Goods inventory |
$ 60,000 |
$ 40,000 |
$ 30,000 |
| Goods in process inventory |
$ 60,000 |
$ 65,000 |
$ 60,000 |
| Raw materials inventory |
$ 60,000 |
$ 40,000 |
$ 35,000 |
| Sales |
$ 400,000 |
$ 340,000 |
$ 300,000 |
| Cost of goods sold |
$ 225,000 |
$ 230,000 |
$ 210,000 |
| Cost of goods manufactured |
$ 260,000 |
$ 250,000 |
$ 200,000 |
| Raw materisals used in production |
$ 150,000 |
$ 130,000 |
$ 120,000 |
Instructions:
Problem 1. Compute turnover rates for 2011 and 2010 for the following:
a) Finished Goods
b) Goods in Process
c) Raw Materials
Problem 2. Analyze the turnover results as to reasonableness and the message they send to a statement reader.