Your company sells $469,300 of goods during the year that have a cost of $398,600.Inventory was $29,783 at the beginning of the year and $34,038 at the end of the year.
-Use the information above to answer the following question.How long on average does it take to sell something from inventory after it is purchased?
A) 12.5 days
B) 24.8 days
C) 29.2 days
D) 165.9 days

Question

Quizplus · Accepted Answer

The average inventory is ($29,783 + $34,038) / 2 = $31,910.5. The inventory turnover ratio is Cost of Goods Sold / Average Inventory = $398,600 / $31,910.5 ≈ 12.49. The average days to sell inventory is 365 / Inventory Turnover Ratio ≈ 29.2 days.

Your Company Sells $469,300 of Goods During the Year That