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Compute and Analyze Inventory Turnover

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:

1. Compute turnover rates for 2011 and 2010 for the following:
a) Finished Goods
b) Goods in Process
c) Raw Materials

2. Analyze the turnover results as to reasonableness and the message they send to a statement reader.

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Solution Summary

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:

1. Compute turnover rates for 2011 and 2010 for the following:
a) Finished Goods
b) Goods in Process
c) Raw Materials

2. Analyze the turnover results as to reasonableness and the message they send to a statement reader.

$2.19