Given the following information, calculate the inventory turns.
Sales = $200,000,000
Cost of sales = $160,000,000
Average inventory = $ 40,000,000
Carrying cost = 12%
A) 0.20
B) 0.25
C) 4.0
D) 5.0

Question

Quizplus · Accepted Answer

Inventory Turnover Ratio = Cost of Sales / Average Inventory

Cost of sales = $160,000,000
Average Inventory = $40,000,000

Inventory Turnover Ratio =  $160,000,000 / $40,000,000 = 4

Therefore, the answer is C.

Given the Following Information, Calculate the Inventory Turns