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2 years ago

Use the following information for Shafer Company to compute inventory turnover for year 2.

Business

1 answer:

lidiya [134]2 years ago

7 0

Answer:

The correct answer is B.

Explanation:

Giving the following information:

Year 2 Year 1

Net sales $651,500 $583,700

Cost of goods sold 389,300 360,920

Ending inventory 78,500 80,180

To calculate the inventory turnover, we need to use the following formula:

Inventory turnover= Cost of goods sold/ average inventory

Average inventory= (beginning inventory + ending inventory) / 2

Average inventory= 158,680/2= 79,340

Inventory turnover= 389,300/79,340

Inventory turnover= 4.91

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