Tim's Sporting Goods had net sales of $1,210,540 for the year. If the beginning inventory at retail was $322,800 and the ending inventory at retail was $412,600, find the inventory turnover at retail. (Round your answer to the nearest tenth)
A) 3.3 Times
B) 4.1 Times
C) 7.2 Times
D) 10.4 Times

Question

Quizplus · Accepted Answer

The inventory turnover at retail is calculated by dividing the cost of goods sold (COGS) by the average inventory at retail. First, find the average inventory: (Beginning Inventory + Ending Inventory) / 2 = ($322,800 + $412,600) / 2 = $367,700. Then, since net sales are given instead of COGS and assuming net sales approximate COGS for this calculation, the inventory turnover is: $1,210,540 / $367,700 = 3.3 times, rounded to the nearest tenth.

Tim's Sporting Goods Had Net Sales of $1,210,540 for the Year