A firm is planning for next year and has developed the following information. $\begin{array}{ll}
\text { Thisyear's sales } & \$ 7.90 \mathrm{M} \
\text { Next year's sales } & \$ 9.48 \mathrm{M} \
\text { This year's inventory } & \$ 2.37 \mathrm{M}\\text { This ye a1's cost ratio* } & 60.0 \% & * \text { Cost of goods sold (COGS) } \
\text { Next year's cost ratio* } & 55.0 \% & \text { as a } \% \text { of sales }
\end{array}$ What inventory balance should be included in next year's plan if management intends to increase inventory turnover by two turns in the coming year? Calculate using ending balances and the COGS formulation of inventory turnover.

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The Answer of A firm is planning for next year and has developed the following information. $\begin{array}{ll}
\text { Thisyear's sales } & \$ 7.90 \mathrm{M} \
\text { Next year's sales } & \$ 9.48 \mathrm{M} \
\text { This year's inventory } & \$ 2.37 \mathrm{M}\\text { This ye a1's cost ratio* } & 60.0 \% & * \text { Cost of goods sold (COGS) } \
\text { Next year's cost ratio* } & 55.0 \% & \text { as a } \% \text { of sales }
\end{array}$ What inventory balance should be included in next year's plan if management intends to increase inventory turnover by two turns in the coming year? Calculate using ending balances and the COGS formulation of inventory turnover.

A Firm Is Planning for Next Year and Has Developed