The average inventory at cost for Western Gear, Inc. was $367,985. The turnover rate at cost was 3.4, based on cost of goods sold of $1,251,150. The published inventory turnover at cost is 5.7. Since the actual turnover rate is less than the published rate, calculate the target average inventory at cost. (Round your answer to the nearest dollar)

Question

Quizplus · Accepted Answer

The target average inventory at cost can be calculated using the formula: Cost of Goods Sold / Inventory Turnover Rate. Given the cost of goods sold is $1,251,150 and the published inventory turnover rate is 5.7, the calculation is $1,251,150 / 5.7 = $219,500 (rounded to the nearest dollar).

The Average Inventory at Cost for Western Gear, Inc