Save-Mor Merchandisers had net sales of $422,300 for the year. If the beginning inventory at retail was $250,900 and the ending inventory at retail was $171,400, find the inventory turnover at retail. (Round your answer to the nearest tenth)
A) 2.0 Times
B) 1.7 Times
C) 2.5 Times
D) 1.5 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 COGS by subtracting the ending inventory from the sum of the beginning inventory and net sales: $250,900 (beginning inventory) + $422,300 (net sales) - $171,400 (ending inventory) = $501,800 (COGS). Then, calculate the average inventory: ($250,900 + $171,400) / 2 = $211,150. Finally, divide the COGS by the average inventory: $501,800 / $211,150 = 2.38, which rounds to 2.0 times.

Save-Mor Merchandisers Had Net Sales of $422,300 for the Year