Kraers Inc. keeps an average of 200 finished widgets in inventory each month, and it has sold 2,000 widgets this year. Therefore, the inventory turnover of the company is _____.
A) 10
B) 20
C) 100
D) 200

Question

Quizplus · Accepted Answer

Inventory turnover is calculated by dividing the cost of goods sold (or sales) by the average inventory. Here, 2,000 widgets sold divided by 200 average inventory equals an inventory turnover of 10.