Suppose that Dunn Industries has annual sales of $4.05 million, cost of goods so
ID: 2748549 • Letter: S
Question
Suppose that Dunn Industries has annual sales of $4.05 million, cost of goods sold of $1,620,000, average inventories of $1,086,000, and average accounts receivable of $720,000. Assume that all of Dunn’s sales are on credit.
What will be the firm’s operating cycle? (Use 365 days a year. Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Suppose that Dunn Industries has annual sales of $4.05 million, cost of goods sold of $1,620,000, average inventories of $1,086,000, and average accounts receivable of $720,000. Assume that all of Dunn’s sales are on credit.
Explanation / Answer
Operating Cycle = [(365/1620000)*1086000] + [(365/4050000)*720000]
= (244.6852+64.8889)
= 309.6 days