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(Solved): A manufacturing company producing medical devices reported $60,000,000 in sales over the last year. ...

A manufacturing company producing medical devices reported $60,000,000 in sales over the last year. At the end of the same year, the company had $20,000,000 worth of inventory of ready-to-ship devices. a. Assuming that units in inventory are valued based on COGS at $1,000 per unit and are sold for $2,000 per unit, how fast does the company turn its inventory? The company uses a 25% per year carrying cost of inventory. I.e., in the case that one unit of $1,000 sits exactly one year in inventory, the company charges its operations division a $250 inventory carrying cost. b. What—in absolute terms—is the per unit inventory carrying cost for a product that costs $1,000? Q2.9 (Major U.S. Retailers) The following table shows financial data (year 2004) for Costco Wholesale and Wal-Mart, two major U.S. retailers. Assume that both companies have an average annual holding cost rate of 30 percent (i.e., it costs both retailers $3 to hold an item that they procured for $10 for one entire year). a. How many days, on average, does a product stay in Costco's inventory before it is sold? Assume that stores are operated 365 days a year. b. How much lower is, on average, the inventory cost for Costco compared to Wal-Mart of a household cleaner valued at $5 COGS? Assume that the unit cost of the household cleaner is the same for both companies and that the price and the inventory turns of an item are independent. Optional: To give you some flexibility, the following problems are NOT required for submission. But, please do them when you get time. It will be helpful. Q2.10 (McDonald's) The following figures are taken from the 2003 financial statements of McDonald's and Wendy's.1 Figures are in million dollars.

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