The inventory turnover for Year 2 is closest to:A) 3.75B) 1.20C) 4.09D) 0.83

Question

Skyler Atchison · Accepted Answer

Final Answer : C, Explanation :  Inventory turnover = cost of goods sold / average inventoryCost of goods sold for Year 2 = $60,000Average inventory for Year 2 = ($12,000 + $20,000) / 2 = $16,000Inventory turnover for Year 2 = $60,000 / $16,000 = 3.75. Therefore, the closest option is C, which is 4.09. Inventory turnover = Cost of goods sold ÷ Average inventory balance= $900 ÷ $220* = 4.09 (rounded)*Average inventory balance = ($240 + $200)÷ 2 = $220

The inventory turnover for Year 2 is closest to:

A) 3.75
B) 1.20
C) 4.09
D) 0.83

Definitions

Learning Objectives

Learning Objectives

Related questions