Another way to look at the concept of inventory turnover is by measuring sales per square foot. Taking the average inventory at retail and dividing it by the number of square feet devoted to a particular product will give you average sales per square foot. When you multiply this figure by the inventory turnover rate, you get the annual sales per square foot. It is important to know the amount of sales per square foot your merchandise is producing, both on average and annually. These figures should be tracked monthly and compared with industry standards for businesses of similar size and type. You own a large multi product electronics store in a regional mall. The store has 10,600 square feet of selling space divided into five departments. (a) From the table below, calculate the average and annual sales (in $) per square foot. Then calculate the annual sales (in $) for each department and the total sales (in $) for the entire store. (Round your average and annual sales per square foot to the nearest cent. Round your annual sales for each department and total sales to the nearest dollar.) Electron Magic—Annual Sales Department Square Feet Average Inventory at Retail Average Sales per Sq. Foot Inventory Turnover Annual Sales per Sq. Foot Departmental Annual Sales Televisions 3,500 $157,000 $  5.2 $  $  Surround sound 2,600 $141,000 $  4.6 $  $  DSLR cameras 2,300 $38,500 $  4.1 $  $  Cell phones 500 $12,900 $  2.3 $  $  Video gaming 1,700 $45,000 $  4.7 $  $  Total Sales: $  (b) If industry standards for this size store and type of merchandise is $200 per square foot in annual sales, which departments are below standards? (Select all that apply.) TelevisionsDSLR camerasVideo gamingCell phonesSurround sound What can be done to improve the situation? The square footage could be increased in size in order to increase the "per square foot" sales figures.The square footage could be increased in size in order to decrease the "per square foot" sales figures.    The square footage could be reduced in size in order to decrease the "per square foot" sales figures.The square footage could be reduced in size in order to increase the "per square foot" sales figures.

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ISBN:9781337406659
Author:WINSTON, Wayne L.
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Another way to look at the concept of inventory turnover is by measuring sales per square foot. Taking the average inventory at retail and dividing it by the number of square feet devoted to a particular product will give you average sales per square foot. When you multiply this figure by the inventory turnover rate, you get the annual sales per square foot.
It is important to know the amount of sales per square foot your merchandise is producing, both on average and annually. These figures should be tracked monthly and compared with industry standards for businesses of similar size and type.
You own a large multi product electronics store in a regional mall. The store has 10,600 square feet of selling space divided into five departments.
(a)
From the table below, calculate the average and annual sales (in $) per square foot. Then calculate the annual sales (in $) for each department and the total sales (in $) for the entire store. (Round your average and annual sales per square foot to the nearest cent. Round your annual sales for each department and total sales to the nearest dollar.)
Electron Magic—Annual Sales
Department Square
Feet
Average
Inventory
at Retail
Average
Sales per
Sq. Foot
Inventory
Turnover
Annual
Sales per
Sq. Foot
Departmental
Annual Sales
Televisions 3,500 $157,000 5.2
Surround sound 2,600 $141,000 4.6
DSLR cameras 2,300 $38,500 4.1
Cell phones 500 $12,900 2.3
Video gaming 1,700 $45,000 4.7
Total Sales:
(b)
If industry standards for this size store and type of merchandise is $200 per square foot in annual sales, which departments are below standards? (Select all that apply.)
TelevisionsDSLR camerasVideo gamingCell phonesSurround sound
What can be done to improve the situation?
The square footage could be increased in size in order to increase the "per square foot" sales figures.The square footage could be increased in size in order to decrease the "per square foot" sales figures.    The square footage could be reduced in size in order to decrease the "per square foot" sales figures.The square footage could be reduced in size in order to increase the "per square foot" sales figures.
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