At the beginning of the year, American International had inventory worth $325,500 at cost. At the end of the year, the cost value of the inventory was $540,250. If annual cost of goods sold was $1,978,250 find the inventory turnover at cost for the year. (Round your answer to the nearest tenth)
A) 3.7
B) 4.6
C) 5.2
D) 1.9

Question

Quizplus · Accepted Answer

The inventory turnover at cost is calculated as the cost of goods sold divided by the average inventory. The average inventory is ($325,500 + $540,250) / 2 = $432,875. The inventory turnover is $1,978,250 / $432,875 = 4.6.

At the Beginning of the Year, American International Had Inventory