A company has an average inventory on hand of $60,000 and the average days to sell inventory is 29.2 days. What is the cost of goods sold?
A) $750,000
B) $1,752,000
C) $739,726
D) $876,000

Question

Quizplus · Accepted Answer

Inventory turnover = Cost of goods sold / Average inventoryInventory turnover = 365 days / Average days to sell inventoryInventory turnover = 365 days / 29.2 daysInventory turnover = 12.5Cost of goods sold = Inventory turnover * Average inventoryCost of goods sold = 12.5 * $60,000Cost of goods sold = $750,000

A Company Has an Average Inventory on Hand of $60,000