Question

At the beginning of the year, American International had inventory worth $325,500 at cost. At the end of the year, the cost value of the inventory was $540,250. If annual cost of goods sold was $1,978,250 find the inventory turnover at cost for the year. (Round your answer to the nearest tenth) Group of answer choices

Answer 1

Answer:

Inventory turnover= 4.57

Explanation:

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= (325,500 + 540,250) / 2

Average inventory= 432,875

Inventory turnover= 1,978,250 / 432,875

Inventory turnover= 4.57