Bobaflex Corporation has ending inventory of $690,573 and cost of goods sold for
ID: 2732900 • Letter: B
Question
Bobaflex Corporation has ending inventory of $690,573 and cost of goods sold for the year just ended was $5,132,340.
Requirement 1: What is the inventory turnover? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) Inventory turnover times Requirement 2: What is the days’ sales in inventory? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) Days’ sales in inventory days
Requirement 3: How long on average did a unit of inventory sit on the shelf before it was sold? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) Days on the shelf days
Explanation / Answer
Bobaflex Corporation :
Ending inventory = $690573
Cost of Goods sold during the year = $5132340
Requirement 1 :
Inventory Turnover = Cost of Goods sold / Ending Inventory
= $5132340 / $690573 =7.43 times
Requirement 2 :
Days Sales in Inventory = 365 days/Inventory Turnover
= 365/7.43 =49.16 days
Requirement 3:
A Unit was manufactured 49.16 days before its was sold.