Bobaflex Corporation has ending inventory of $715,773 and cost of goods sold for
ID: 2819068 • Letter: B
Question
Bobaflex Corporation has ending inventory of $715,773 and cost of goods sold for the year just ended was $9,505,462.
What is the inventory turnover? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
What is the days’ sales in inventory? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
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.)
Explanation / Answer
1.inventory turnover = cost of goods sold / inventory
=>$9,505,462 / 715,773
=>13.28 times.
2.days' sales in inventory
=>365 days / inventory turnover
=>27.48 days.
3.A unit sits in shelf for 27.48 days before it is sold.
(days sales in inventory is the measure of the days a unit will stay in inventory before being sold).