North Side Wholesalers has sales of $1,648,900. The cost of goods sold is equal to 71 percent of sales and the average inventory is $75,800. How many days on average does it take to sell the inventory?

Question

Quizplus · Accepted Answer

To find the average days to sell the inventory, first calculate the inventory turnover ratio: Inventory Turnover = Cost of Goods Sold / Average Inventory. Cost of Goods Sold = 71% of $1,648,900 = $1,170,719. Inventory Turnover = $1,170,719 / $75,800 = 15.45. Then, calculate the days in inventory: Days in Inventory = 365 / Inventory Turnover = 365 / 15.45 ≈ 23.63 days.

North Side Wholesalers Has Sales of $1,648,900