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solve this one for me please

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 Sanchay Maity CWA , CA - FINAL [ Scorecard : 98] problem on inventory management -   Q >> A company has forecast sales and cost of sales for the coming year as Rs.25 lacs and Rs.18 lacs respectively.The inventory turnover has been taken as 9 times per year.In case th inventory turnover increases to 12 times and the short term interest rate on working capital is taken as 10%, what will be the saving in cost ?   Ans - savings will be rs.5000   Now can anyone let me knw of the solution ? CA Nitin Wadhwani Chartered Accountant [ Scorecard : 4444] Inventory Turnover Ratio = Cost Of Goods Sold/Avg.Stock                                     9                                       =           18.00/Avg.Stock Avg.stock = 2.00 lacs           12                                  =            18.00/Avg.Stock  Avg.Stock = 1.50 lacs   Reduction in Stock Level = 50000 Savings = 50000 * 10% = 5000/- Nag C.A Final, C.S Final Articled Student [ Scorecard : 107] given inventory turnover 9 times a year, total cost = 18 lks average stock level =18/9=2 lks carrying cost = 2 lks*10/100=20000 if inventory turnover is 12 times ,average stock level =18/12=1.5 lks carrying cost = 1.5*10/100=15000 incrimental savings = 5000

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