Mabuhay Corporation manufactures special types of furniture and fixtures for the use of luxury hotels in the country. It buys raw materials every 5th day of the month for ₱ 1,000,000. The suppliers of raw materials provide only 30-day credit terms to Mabuhay Corporation. It takes 90 days to convert the raw materials into finished products. Once the products are finished, Mabuhay sells them to luxury hotels on account. The buyers are given 30 days to settle their account. What is the conversion cycle of Mabuhay Corporation?
Mabuhay Corporation manufactures special types of furniture and fixtures for the use of luxury hotels in the country. It buys raw materials every 5th day of the month for ₱ 1,000,000. The suppliers of raw materials provide only 30-day credit terms to Mabuhay Corporation. It takes 90 days to convert the raw materials into finished products. Once the products are finished, Mabuhay sells them to luxury hotels on account. The buyers are given 30 days to settle their account. What is the conversion cycle of Mabuhay Corporation?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Mabuhay Corporation manufactures special types of furniture and fixtures for the use of luxury hotels in the country. It buys raw materials every 5th day of the month for ₱ 1,000,000. The suppliers of raw materials provide only 30-day credit terms to Mabuhay Corporation. It takes 90 days to convert the raw materials into finished products. Once the products are finished, Mabuhay sells them to luxury hotels on account. The buyers are given 30 days to settle their account. What is the conversion cycle of Mabuhay Corporation?
Use this formula:
Unit Product Cost = fixed cost + variable cost/ expected unit sales
Mark Up Price = Unit Product Cost/ Desired Return on Sale
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