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LenaWriter [7]
3 years ago
5

A company reports the following: Cost of goods sold $660,000 Average inventory 60,000 Determine (a) the inventory turnover and (

b) the number of days' sales in inventory. Round interim calculations to the nearest dollar and final answers to one decimal place. Assume 365 days a year.
Business
1 answer:
rusak2 [61]3 years ago
3 0

Answer:

the inventory turnover is 11

while the average days outstanding is 33 days

Explanation:

<u>inventory turnover:</u>

the amount of times the inventory rotetes (is being sold) during the period

\frac{COGS}{AVERAGE\: INVENTORY }

660,000/60,000 = 11

The company sold his invenotry 11 times

<u>days outstanding :</u>

time to sale the entire inventory

if it rotates 11 times per year and the year has 365 days then:

\frac{365}{inventory_{TO}}

365/11 = 33.18 = 33days

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Answer:

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