Corporate Financial Accounting
15th Edition
ISBN: 9781337398169
Author: Carl Warren, Jeff Jones
Publisher: Cengage Learning
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Chapter 6, Problem 6.4MAD
Analyze and compare Monster Beverage and Brown-Forman
Monster Beverage Corporation (MNST) develops, markets, and sells energy and other alternative beverage brands. Brown-Forman Corporation (BF.B) manufactures and sells a wide variety of spirit and wine beverages, such as Jack Daniel’s â. The cost of goods sold and inventory were obtained from a recent annual report for both companies as follows (in millions):
| Monster Beverage | Brown-Forman | |
| Cost of goods sold | $1,090 | $ 945 |
| Inventories: | ||
| Beginning of year | 175 | 953 |
| End of year | 156 | 1,054 |
- a. Determine the inventory turnover for bath companies. Round all calculations to one decimal place.
- b. Determine the number of days’ sales in inventory for both companies. Use 365 days and round all calculations to one decimal place.
- c.
Interpret the difference in inventory efficiency based on the companies’ respective product types.
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Analyze and compare Monster Beverage and Brown-Forman
Monster Beverage Corporation (MNST) develops, markets, and sells energy and other alternative beverage brands. Brown-Forman Corporation (BF.B) manufactures and sells a wide variety of spirit and wine beverages, such as Jack
Daniel's®. The cost of goods sold and inventory were obtained from a recent annual report for both companies as follows (in millions):
Cost of goods sold
Inventories:
Beginning of year
End of year
a. Determine the inventory turnover for both companies. If required, round all computations to one decimal place and use in subsequent calculations. Round final answers to one decimal place.
Inventory Turnover
Monster Beverage
Monster Beverage Brown-Forman
$1,512
$973
Monster Beverage
Brown-Forman
Brown-Forman
b. Determine the days' sales in inventory for both companies. Assume a 365-day year. If required, round all computations to one decimal place and use in subsequent calculations. Round final answers to one decimal…
Calculate the value of cost of goods sold for Benson's Brewing Company given the following information: Current liabilities = $540,000; Quick ratio = 1.8; Inventory turnover = 6.0; Current ratio = 2.3.
Select one:
a. $1,620,000
b. $3,999,999
c. $3,060,000
d. $2,180,222
e. $2,040,000
Net sales for the year were $450,000 and cost of goods sold was $297,000 for the company's existing products. A
new product is presently under development and has an expected selling price of not more than $75 per unit in
order to remain competitive with similar products in the marketplace.
Required:
a. Calculate gross profit and the gross profit ratio for the year.
Net sales
Cost of goods sold
Gross profit
$ 450,000
$ 153,000
b. What is the maximum cost per unit that can be incurred to manufacture the new product so that the product can
be priced competitively and will not result in a reduction to the company's gross profit ratio? (Round your final
answer to 2 decimal places.)
Maximum manufacturing cost
per unit
Chapter 6 Solutions
Corporate Financial Accounting
Ch. 6 - Prob. 1DQCh. 6 - Why is it important to periodically take a...Ch. 6 - Do the terms FIFO, LIFO, and weighted average...Ch. 6 - If inventory is being valued at cost and the price...Ch. 6 - Which of the three methods of inventory...Ch. 6 - If inventory is being valued at cost and the price...Ch. 6 - Using the following data, how should the inventory...Ch. 6 - The inventory at the end of the year was...Ch. 6 - Hutch Co. sold merchandise to Bibbins Company on...Ch. 6 - A manufacturer shipped merchandise to a retailer...
Ch. 6 - Cost flow methods The following three identical...Ch. 6 - Perpetual inventory using FIFO Beginning...Ch. 6 - Perpetual inventory using LIFO Beginning...Ch. 6 - Perpetual inventory using weighted average...Ch. 6 - Periodic inventory using FIFO, LIFO, and weighted...Ch. 6 - Lower-of-cost-or-market method On the basis of the...Ch. 6 - Effect of inventory errors During the taking of...Ch. 6 - Effect of inventory errors During the taking of...Ch. 6 - Control of inventories Triple Creek Hardware Store...Ch. 6 - Control of inventories Hardcase Luggage Shop is a...Ch. 6 - Perpetual inventory using FIFO Beginning...Ch. 6 - Perpetual inventory using LIFO Assume that the...Ch. 6 - Perpetual inventory using LIFO Beginning...Ch. 6 - Perpetual inventory using FIFO Assume that the...Ch. 6 - FIFO and UFO costs under perpetual inventory...Ch. 6 - Weighted average cost flow method under perpetual...Ch. 6 - Weighted average cost flow method under perpetual...Ch. 6 - Perpetual inventory using FIFO Assume that the...Ch. 6 - Perpetual inventory using LIFO Assume that the...Ch. 6 - Periodic inventory by three methods The units of...Ch. 6 - Periodic inventory by three methods; cost of goods...Ch. 6 - Comparing inventory methods Assume that a firm...Ch. 6 - Lower-of-cost-or-market inventory On the basis of...Ch. 6 - Inventory on the balance sheet Based on the data...Ch. 6 - Effect of errors n physical inventory Madison...Ch. 6 - Effect of errors in physical inventory Fonda...Ch. 6 - Error in inventory During 20Y5, the accountant...Ch. 6 - Retail method A business using the retail method...Ch. 6 - Retail method A business using the retail method...Ch. 6 - Prob. 6.22EXCh. 6 - Retail method On the basis of the following data,...Ch. 6 - Prob. 6.24EXCh. 6 - Gross profit method Based on the following data,...Ch. 6 - Gross profit method Based on the following data,...Ch. 6 - FIFO perpetual inventory The beginning inventory...Ch. 6 - LIFO perpetual inventory The beginning inventory...Ch. 6 - Weighted average cost method with perpetual...Ch. 6 - Periodic inventory by three methods The beginning...Ch. 6 - Periodic inventory by three methods Dymac...Ch. 6 - Lower-of-cost-or-market inventory Data on the...Ch. 6 - Retail method; gross profit method Selected data...Ch. 6 - FIFO perpetual inventory The beginning inventory...Ch. 6 - LIFO perpetual inventory The beginning inventory...Ch. 6 - Weighted average cost method with perpetual...Ch. 6 - Periodic inventory by three methods The beginning...Ch. 6 - Periodic inventory by three methods Pappas...Ch. 6 - Lower-of-cost-or-market inventory Data on the...Ch. 6 - Retail method; gross profit method Selected data...Ch. 6 - Prob. 6.1MADCh. 6 - Analyze and compare Darden Restaurants to Panera...Ch. 6 - Analyze and compare Costco, Wal-Mart, and...Ch. 6 - Analyze and compare Monster Beverage and...Ch. 6 - Ethics in Action Sizemo Elektroniks sells...Ch. 6 - Ethics in Action Anstead Co. is experiencing a...Ch. 6 - Communication Golden Eagle Company began...
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