Answered: Identify the better performer between…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter9: Responsibility Accounting And Decentralization

Section: Chapter Questions

Problem 1PB: Use the following information to answer the questions that follow. A. Calculate the operating income...

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Using the information you calculated in How much Part 1 add a Days on Hand calculation to Dollar General and Best Buy in addition to Inventory Turnover. Identify the better performer between Best Buy and Dollar General. Calculate how much inventory the lower performer would have to reduce to match the Days on Hand/Inventory Turnover Ratio of the better performer and calculate the annual savings using the same 25% carrying or holding cost as in Part 1. Include all calculations, your choice of the better performer, and a brief description of how you calculated the new inventory.

here is how much part one

Company	COGS ( Cost of Inventory for the entire year)	Current Inventory Value	Inventory carrying cost based on 25%	Inventory Turnover Ratio
Best Buy( 2020)	33,662,000,000	5,174,000,000	1293500000	6.505991496
Dollar General (2020)	19,264,912,000	4,676,848,000	1169212000	4.119208493
Target(2020)	57,221,000,000	8,992,000,000	2248000000

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