Preview

Group Project - Dorel Industries

Satisfactory Essays
Open Document
Open Document
2357 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Group Project - Dorel Industries
COMM 217 FINANCIAL ACCOUNTING
FALL 2012
Section (lecture): B
Group Project Part 2 (of 2)
Dorel Inc.

Presented to:
Prof. George Kanaan

Date: November 22nd 2012
John Molson School of Business – Concordia University

$ = thousands of U.S. dollars
Chapter 8
8.1
Cost of Sales Equation = Beginning Inventory + Purchases - Ending Inventory
1 846 470 000 = 510 068 000 + 177 811 000 - 442 409 000
Purchases for the year 2011 total $65 812 530.
8.2
Dorel calculates costs of inventory with the use of a First in, First Out (FIFO) system. The reason for choosing the FIFO inventory cost system could be due to the fact that managers at Dorel like to report higher earnings for their company. In the case for FIFO, since it results in higher profit, due to a lower cost of sales, it is preferable.
8.3
a) The inventory turnover ratio reflects how many times average inventory was produced and sold during the period. Furthermore, average days measures the average amount of time takes for the company to sell and deliver inventory to customers.
b)
1) Inventory Turnover = Cost of Sales / Average Total Inventory
2) Average # of Days to Sell Inventory = Average Inventory/ (Cost of Sales /365 days)
2011
1) 1 846 470 000/ [(510 068 000 + 442 409 000)/2] = 3.88
2) [(510 068 000 + 442 409 000)/2]/ ( 1 846 470 000/ 365 days) = 94.1 days
2010
1) 1 778 938 000/ [(399 866 000 +510 068 000)/2] = 3.91 2) [(399 866 000 +510 068 000)/2] / (1 778 938 000/ 365 days) = 93.4 days
2009
1) 1 634 570 000/ [(509 467 000 + 399 866 000)/2] = 3.60 2) [(509 467 000 + 399 866 000)/2]/ (1 634 570 000/ 365 days) = 101.4 days

c) In terms of the average number of days to sell inventory, the company has taken less time to produce and sell inventory from 2009 to 2010. However, from 2010 to 2011, the company has increased the amount of days it needs to produce and sell inventory by 0.7 days.
In terms of the average inventory turnover, the company has been

You May Also Find These Documents Helpful

  • Powerful Essays

    Hrm 531 Week 3 Quiz

    • 4852 Words
    • 20 Pages

    If a company has ending inventory of $25,000, purchases during the year of $95,000, and beginning…

    • 4852 Words
    • 20 Pages
    Powerful Essays
  • Satisfactory Essays

    The textbook also states that there are only 360 days within the year. The ADB can be calculated as…

    • 93 Words
    • 1 Page
    Satisfactory Essays
  • Satisfactory Essays

    Acc 422 E9-1 & E9-12

    • 383 Words
    • 2 Pages

    (a) Compute the estimated inventory at May 31, assuming that the gross profit is 25% of sales.…

    • 383 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Mhs Analysis

    • 384 Words
    • 2 Pages

    2. Metropolis currently has $1,150,000.00 in cash. How long would it take them to accumulate $2,000,000.00 in cash? Assume and interest rate of 5 percent.…

    • 384 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Hit 105 Math Exam

    • 808 Words
    • 4 Pages

    After 8 years the balance in the account = (900(P/A, 6%, 14)) * (F/P, 6%, 16)…

    • 808 Words
    • 4 Pages
    Satisfactory Essays
  • Good Essays

    Mat 540 Final Exam Paper

    • 778 Words
    • 4 Pages

    To the closest year, how long will it take $200 to double if it is deposited and earns the following rates?…

    • 778 Words
    • 4 Pages
    Good Essays
  • Good Essays

    Econ 301

    • 385 Words
    • 2 Pages

    1) Beginning in year 0, with a payment of $50,000, what is the present value of an asset in perpetuity which grows by 4% each year and which is discounted at the rate of 6% each year?…

    • 385 Words
    • 2 Pages
    Good Essays
  • Satisfactory Essays

    Birthday Lab

    • 314 Words
    • 2 Pages

    Now find the number of days since the New Moon above until your birthday: if new moon occurred after your birthday, go to the previous month option . How “old” is the Moon, in days past new?…

    • 314 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Web Search 2

    • 739 Words
    • 3 Pages

    5. If a company has beginning inventory of $30,000 and ending inventory of $55,000, compute its average inventory. If the cost of goods sold is $140,000, compute its inventory turnover and determine how many days the average item is in stock. The average inventory would be 42,500, and average…

    • 739 Words
    • 3 Pages
    Good Essays
  • Satisfactory Essays

    How to Calculate ADSD

    • 280 Words
    • 2 Pages

    0 years 0 months 46 days AT (Two 15 day and one 16 day ATs)…

    • 280 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Cost Of Goods WEEK 7

    • 275 Words
    • 1 Page

    in June 300,000 - ending inventory in June 50,000 = 350,000 (cost of inventory). Here are some examples…

    • 275 Words
    • 1 Page
    Satisfactory Essays
  • Satisfactory Essays

    3. In 2007, approximately how many days, on average, did it take from the time Pets, Inc. purchased its inventory until it collected the cash from its customers? (Hint: Use days in collection period plus days in the selling period. Pick the closest number)…

    • 2095 Words
    • 15 Pages
    Satisfactory Essays
  • Powerful Essays

    As stated in the description of the Conche activity: 1.400kg of semisweet chocolate contains 850kg of nibs, in other words, 1kg of semi sweet chocolate  850/1400=0,6071kg of nibs…

    • 3275 Words
    • 14 Pages
    Powerful Essays
  • Satisfactory Essays

    vietnam bond market

    • 288 Words
    • 6 Pages

    The Vietnam bond market development was boosted when Vietnam entered WTO in 2006. Total market capitalsisation is now at…

    • 288 Words
    • 6 Pages
    Satisfactory Essays
  • Powerful Essays

    Economics Performance

    • 1221 Words
    • 10 Pages

    In India, GDP growth rate measures the change in the seasonally adjusted value of the…

    • 1221 Words
    • 10 Pages
    Powerful Essays