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HACTEHA [7]
3 years ago
13

A company reports the following: Cost of goods sold $435,000Average inventory 72,500 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:
Andreyy893 years ago
4 0

Answer:

(a) 6

(b) 60.8 days

Explanation:

Given that,

Cost of goods sold = $435,000

Average inventory = 72,500

Therefore,

(a) Inventory turnover ratio:

= Cost of goods sold ÷ Average inventory

= $435,000 ÷ 72,500

= 6

Therefore, the inventory turnover ratio is 6.

(b) Number of days' sales in inventory:

= 365 days ÷ Inventory turnover ratio

= 365 days ÷ 6

= 60.8 days

Therefore, the number of days sales in inventory is 60.8 days.

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2 years ago
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3 years ago
Pharoah Company Ltd. publishes a monthly sports magazine, Fishing Preview. Subscriptions to the magazine cost $28 per year. Duri
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