Karr Company has a beginning merchandise inventory of $17,000, an ending merchandise inventory of $20,000, sales of $350,000, and a cost of goods sold of $200,000. Karr's inventory turnover is
A) 10.0 times.
B) 10.8 times.
C) 17.5 times.
D) 18.9 times.

Question

Quizplus · Accepted Answer

Inventory turnover is calculated as Cost of Goods Sold divided by Average Inventory. Average Inventory is (Beginning Inventory + Ending Inventory) / 2 = ($17,000 + $20,000) / 2 = $18,500. Thus, Inventory Turnover = $200,000 / $18,500 = 10.8 times.

Karr Company Has a Beginning Merchandise Inventory of $17,000, an Ending