Question

New products has sales of $913,000 and cost of goods sold of $684,000. the firm had a beginning inventory of $43,000 and an ending inventory of $48,000. what is the length of the inventory period?

Answer 1

Length of inventory period = Average Inventory / Cost of goods sold * 365 days

Average Inventory = (Beginning Inventory + Ending Inventory) / 2
                              = $45,500

Length of inventory period = Average Inventory / Cost of goods sold * 365 days
                                           = $45,500 / $684,000 * 365
                                           = 24.3 days