Question

A7X Corporation has ending inventory of $698,973 and cost of goods sold for the year just ended was $4,054,513. a. What is the inventory turnover? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the days' sales in inventory? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. How long on average did a unit of inventory sit on the shelf before it was sold? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. Inventory turnover Days' sales in inventory Days on the shelf times days days C.

Answer 1

Inventory turnover=Cost of goods sold/ending inventory

=4,054,513/698,973=5.80 times(Approx)

Days sale in inventory=365/inventory turnover

=365/5.8=62.92 days(Approx)

Days on the shelf=62.92 days(Approx).