BL Motors has sales for the year of $287,400,cost of goods sold equal to 68 percent of sales,and an average inventory of $37,800.The profit margin is 7 percent and the tax rate is 34 percent.How many days on average does it take the firm to sell an inventory item?

Question

Quizplus · Accepted Answer

First, we need to calculate the cost of goods sold:
Cost of Goods Sold = 68% x $287,400 
Cost of Goods Sold = $195,672

Next, we need to calculate the average inventory turnover:
Inventory Turnover = Cost of Goods Sold / Average Inventory 
Inventory Turnover = $195,672 / $37,800 
Inventory Turnover = 5.17

Now we can calculate the number of days it takes to sell an inventory item:
Days to Sell Inventory = 365 / Inventory Turnover 
Days to Sell Inventory = 365 / 5.17 
Days to Sell Inventory = 70.60 days

Therefore, the answer is C.

BL Motors Has Sales for the Year of $287,400,cost of Goods