Beverly Corp

question 37

Essay

Beverly Corp.had total sales of $1,200,000 in 2010 (80 percent of its sales are credit).The company's gross profit margin is 25 percent,its ending inventory is $150,000,and its accounts receivable balance is $90,000.What additional amount of cash could the firm have generated if it had increased its inventory turnover ratio to 9.0 and reduced its average collection period to 28.21875 days?

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Definitions:

Transfer Price

The price charged by one division of a company for products or services that it supplies to another division within the same company.

Valve Division

A specialized department or segment of a company focused on the production and distribution of valves.

Pump Division

A specialized segment within an organization focused on producing and managing pumps.

Customer Service Department

A division within a company that handles inquiries, supports customers with issues, and provides information regarding products or services.