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EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN: 9781337514835
Author: MOYER
Publisher: CENGAGE LEARNING - CONSIGNMENT
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DO fast answer of this accounting questions
![An electronics manufacturer producing smartphones reported the following
data for the previous fiscal year:
a) The company had $75 million in annual sales. Their year-end report
showed they maintained an average inventory worth $15 million in terms of
COGS throughout the year.
b) The annual inventory holding cost rate is 25% of each unit's COGS value,
which includes storage costs, insurance, depreciation, and cost of capital.
What are the annual inventory holding costs for the manufacturer?](https://content.bartleby.com/qna-images/question/33f39daf-c071-4b1a-97a7-d6cfc2e60896/e9ce1203-771e-4ff9-a92e-4dae8f749339/8s7acmm_thumbnail.jpeg)
Transcribed Image Text:An electronics manufacturer producing smartphones reported the following
data for the previous fiscal year:
a) The company had $75 million in annual sales. Their year-end report
showed they maintained an average inventory worth $15 million in terms of
COGS throughout the year.
b) The annual inventory holding cost rate is 25% of each unit's COGS value,
which includes storage costs, insurance, depreciation, and cost of capital.
What are the annual inventory holding costs for the manufacturer?
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