18/6/2015

ProblemswithTC2

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GrahamMitchell

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17daysago

Ihavecheckedandrecheckedtheanswerhereandthesystemwon'tallowmyanswer.Anyoneelse
havingproblems?Ievendidthecalculationin2waysandcametothesameresult.

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ArielGalbiati

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15daysago

Friends,thesystemacceptedallmyanswersandtheyareallrightforallthequestions.
Takeintoaccountthis:
1)Usepointnotcomes,Imeanyoumustwrite10.50not10,50
2)BesidesIwroteforinstance10.00andnotjust10
3)Ididnotusethesign"%"
4)Ididnotusesign"$"
5)Idonotknowifthishelpsbutformeitwasright

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Anonymous 16daysago
Isolvedaswellbutitwontjusttakeinmyanswers

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BehrPalomo 14daysago
Isolvedtheproblemandhadnoissueswiththesystem,whichacceptedmyanswer.I
received10/10pointssoIcansaywithcertaintythateachquestionhasacorrectanswer.
Idon'tknowifithelps,butIgavemyanswerwithoutanysymbols(no"%")andtothetenths
place.
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Anonymous 16daysago
Ihavethesameproblem,evencheckedwithformulasintextbooks,prettysuremyansweriscorrect.I
getnopointthough.

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LilyGeller 15daysago
IwonderifWeek2videoswillcoverTC2typequestionswithProf.Twritingintheprocessonthe
slides.
LikeNina,myanswerwasmarkedcorrect.Graham'scommentaboveworksfortheannualinventory
costofholdingalloftheinventorythatpassedthroughthecompanyoverthecourseofoneyear.
That'snotquitewhathappenswithasingleMP3playerthough.Youhavetofindthecostofgoods
soldfortheMP3player,thenthinkabouthowlongitspendsininventorybeforebeingsold.Hopefully
that'ssomefoodforthoughtwithoutgivingawaythegame.
KyleIput2decimalpointssinceitaskedfortheanswerindollars,andthatseemedtobe
acceptable.Ididnotputa"$"infront,though.Notsureifthatmakesadifference.

1 flag
Anonymous 15daysago
Lily,IhavecalculatedthecostofgoodsoldfortheMP3player,but,unfortunately,Icannot
proceedfurther,sinceIbarelyunderstandwhat'perunitcostofinventory'meanscould
youclarifythismoment,please,withoutgivingawayexactformulas?

0 flag
Anonymous 15daysago
Ihavefinallysolveditbyplayingwithnumberswithoutanyunderstandingofunderlying
process,soIhavetoexpressmypersonaldispleasurewithsuchalearningexperience
withoutproperexplanationoftermsinvolvedinassessments.

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LilyGeller 15daysago
ThewayIsolvedit(notsureifit'sthetextbookmethod)istocalculatethecostofgoodssold
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foroneMP3player,applyingthecompany'saveragemargin(usingtherevenueandtotal
COGSfigures)tothesalespriceoftheMP3player.
ThenyoushouldbeabletousetheinventoryturnyoucalculatedforTC1tofigureouthow
longtheMP3playerspendsininventory.
Finallyyoushouldbeabletoputtogethertheinventorycost(givenasa%),theperunitcost
ofgoodssoldfortheMP3player,andhowlongtheMP3playerspendsininventorytoget
thedollarinventorycostofjustthatoneMP3player.

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Anonymous 15daysago
Thankyou,Lily.Nowthisisgettingmoreunderstandabletome.

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Anonymous 15daysago
ButhowcanweevenfindtheCOS/unitofmp3playerwhentherearen'tanyunitsofmp3
giveninthequestion?
Anditisassumedthatthisretaileronlysellsmp3players?

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DipeshBhoola 15daysago
Thereveryusefulhintsforthosethatyougetincorrect,whichI'vebeenabletousequite
effectively.
Rememberyouhave100attemptsandonlyyourhighestscoreistaken.

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LilyGeller 14daysago
Re:costperunitofMP3playerthehomeworkquestiongivesyouthecompany'srevenue
andCOGS,anditsaysthattheMP3playerhasthesamemarginasthecompanyoverall,so
thisisastraightforwardproportionproblem.
Youknow:thecompany'srevenue,thecompany'sCOGs,theMP3player'ssalesprice
(whichisbasicallytherevenueonthatoneitem)
Youwanttofind:theMP3player'scost
Setupaproportionandsolveforx.

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BehrPalomo 14daysago
Lily,IthoughtIhadthecorrectformula/answerforTC2,butIdidnotusemyanswerfrom
TC1whencalculating,sonowIamnervousIgotpossiblygotitwrong.
Ininterestsofacademicintegrity,letussaywehaveadifferentsituation,whereIhave
calculatedtheInventoryTurntobe8.4times/year,theaverageprofitmarginis188.6%and
theretailcostofmyunits(let'ssayCamcorders)is$2,499.Wouldyoumindillustratingthe
formulayouusedtoidentifywhichvaluesareplacedwhereandgivetheperunitinventory
costformyCamcorders?

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LilyGeller 14daysago
Hm,I'mnotsurehowyouwouldhaveaprofitmarginof188.6%unlessyouhaveanegative
costofgoodssoldyoursupplierispayingyoutotakeproductsofftheirhands.Profit
margin=profit/revenue=(revenuecost)/revenue.Ifprofitmargin>100%,thatmeans
revenuecost>revenue,whichmeanscostmustbeanegativenumbermeaningyou
actuallygotmoneyforpurchasingtheitem.
Let'susebigroundnumbers.SupposeBizCohasrevenueof$1,000,000andcostsof
goodssoldof$400,000.Itsellsawidgetfor$200,andyouwanttofindtheperunitcostof
thewidget(thatis,thecostofgoodssoldwherethegoodsbeingsoldisthewidget).Then
youwouldsolvethisequation:
400,000/1,000,000=x/200
Technicallywe'renotusingthecompany'saveragegrossmargininthissituationbutinstead
steppingaheadastep.Ifweweretousetheaveragemargin,wewouldbesettingupthis
equation:
(1,000,000400,000)/1,000,000=(200x)/200
Whichwouldsimplifytothesameequationasabove.
Inthiscase,x=$80.
NowsupposeBizCo'sinventorycostis20%.Thenthecostofkeepingthatwidgetin
inventoryforafullyearis20%*$80=$16.
ButwhatifBizCoturnsoveritsinventorymoreoftenthanonceperyear?Supposeits
inventoryturnoveris4,meaningonaverageitsgoodsstayininventoryforonly3months
beforebeingsold.Thentheperunitinventorycostofthewidgetshouldreallybeprorated
tojustthe3monthsitstaysininventory:$16*3/12=$4.
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Grahambringsupagreatpointbelowthatwemustmakesomesimplifyingassumptions
aboutTechCo.toapplythismethodology.Sincethecompany'soverallinventorycostmay
includefixeditemsliketransportationandtaxes,wecan'talwaysapplyastraighttimebased
prorationtofindtheperunitinventorycost.Butinthiscase,thisseemstobethecorrect
approach.
Ireadelsewherethatyougotfullscoresonthehomeworksoyoumusthavefiguredthisout
onyourown.Goodwork!

7 flag
LEEKAHSENG

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8daysago

Thankyoulilyforyougreatanalysisandexplaination,finallyIsolvedtheproblem

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GrahamMitchell

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15daysago

Ok,Igeneratedananswerwhichthesystemaccepted,butitstilldoesn'tseemlikeagoodanswer.
Thedifferenceistheinterpretationofthe"costofinventory".Ifyouuseadefinitionofcostovertime,
thenyouneedtoadjustforthetimetheunitspentininventory.However,costofinventorycanalso
includefixedcostssuchastransportandtaxeswhicharenotaffectedbyinventoryturnoverrate.
Anyway,tosolvethisproblem,assumethattheinventorycostis100%timebased.

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NinaYang 16daysago
Ididnothaveaproblemwithit.TheanswerIsubmittedwasmarkedascorrect.

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Anonymous 16daysago
Whatexactlyisthedefinitionoftheterm"annualinventorycostsoftheMP3s"?Iamasking
becauseallwehavegivenonthequestionsheetisthepriceofoneMP3unit.
Ihavenofinance/accountingbackground..couldyoupleasehelpmeoutwiththisone?

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GrahamMitchell

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16daysago

Well,wearenotsupposedtodiscussdetailsofexamquestionssoIwillmakemyanswer
moregeneral.
Itisthecostsassociatedwiththeinventoryotherthanthepurchasepriceoftheinventory
itself,anditexpressedasapercentageoftheinventory.
Seehttp://www.businessdictionary.com/definition/inventorycost.html
Soifastoreholdsinventoryof$1milliononaverage,andtheturnoverofthestockis1
month,andtheinventorycostis10%,thenthemonthlycostofholdingtheinventoryis
$100,000,or$1.2mperyear.However,eventhoughthisiswhatthetextbookssay,the
homeworksystemdoesnotaccepttheanswerusingthismethod.

2 flag
Anonymous 16daysago
Firstofallthankyoufortheexplanation!
Icheckedthedefinitionandcalculateditthiswaybutthesystemdoesn'tacceptmyanswer,
justlikeyousaid.
Idon'tseewhythiswouldn'tbetherightwaytomakethecomputation.

1 flag
BehrPalomo 14daysago
IstartedanotherthreadwhereIdiscussedtheproblemsinmoredetail,ifthathelps.

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KyleWeil 16daysago
Howmanydecimalsareyousupposedtoput?

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NjokuCharlesKelechi

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15daysago

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Ihavetriedwithdifferentwaysbutstillthesystemwonttakemyanswers

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NjokuCharlesKelechi

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14daysago

Finally,Ihavecrackedit.Igotitrightthistime.Interestingly,themoredigdeepintofindingthe
solutionsthebetterunderstandingyouget.Iamreallyenjoyingit.Thesystemtakesintheanswers
onceyougetitright.InmostcasesIdidn'texpressmyanswersindecimal

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Anonymous 14daysago
It'satricklequestion

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LiSun

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12daysago

Ihavesolvedtheproblem,butstilldonotknowwhy.Sincethisisnotanexam,Iposttheformulahere
togetthecorrectanswer.
SalepriceofMP3*COGSofthecompany/Revenuesofthecompany*percentofinventorycost
(given,35%)/Inventoryturns(TC1answer)

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dung11388 5daysago
Frommyperspective,itmaybetheanswer
Numberofbutternutsold=revenue/price=$155,000,000/$50=3,100,000butternuts
Costperbutternut=costofgoodssold/Numberofbutternutsold=$110,050,000/3,100,000=35.5
$/butternut
Inventorycostperbutternut=35%*Costperbutternut/inventoryturns=0.35*35.5/5.5025=2.26
$/butternut

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