New Products has sales of $749,500 and cost of goods sold of $368,600. Beginning inventory is $54,700 and ending inventory is $58,200. What is the length of the inventory period?

Question

Quizplus · Accepted Answer

The inventory period is calculated as the average inventory divided by the cost of goods sold per day. Average inventory is (beginning inventory + ending inventory) / 2 = ($54,700 + $58,200) / 2 = $56,450. Cost of goods sold per day is cost of goods sold / 365 = $368,600 / 365 = $1,009.86. Therefore, the inventory period is $56,450 / $1,009.86 = 55.90 days.

New Products Has Sales of $749,500 and Cost of Goods