In Comparison of 2010 to 2009 Performance,Watson Company's Inventory Turnover

question 29

Essay

In comparison of 2010 to 2009 performance,Watson Company's inventory turnover decreased substantially,although sales and inventory amounts were essentially unchanged.
Required:
During a corporate meeting you heard the following managers postulate why the decreased inventory turnover ratio happened.Which statement best explains the decreased inventory turnover ratio and why?
a.The marketing manager said: The decreased inventory turnover ratio is due to an increase in the cost of goods sold.
b.The operations manager said: The decreased inventory turnover ratio is due to increased gross profit percentage.
c.The credit manager said: The decreased inventory turnover ratio is due to a decrease in the accounts receivable turnover.
d.The shipping manager said: The decreased inventory turnover ratio is due to inventory being shipped FOB destination point that keeps those items in inventory until they reach the purchasers warehouse.

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Definitions:

Functionalism

A theoretical framework in social sciences, particularly sociology and anthropology, focusing on the roles and contributions of societal institutions and norms in maintaining and organizing society.

Positive Affectivity

The tendency to experience and display positive emotions and moods, such as happiness, enthusiasm, and joy.

Emotional Competence

The ability to effectively perceive, express, understand, and manage emotions in oneself and others.

Self-Regulatory Strategies

Techniques or approaches used by individuals to control and direct their thoughts, emotions, and actions towards achieving personal goals.