Cost of goods sold equals $250,000,and average inventory equals $100,000.Days' inventory on hand equals

Question

Quizplus · Accepted Answer

Days' inventory on hand can be calculated using the following formula:

Days' inventory on hand = (Average inventory ÷ Cost of goods sold) × 365

Substituting the given values:

Days' inventory on hand = (100,000 ÷ 250,000) × 365
Days' inventory on hand = 0.4 × 365
Days' inventory on hand = 146.0 days

Therefore, the best choice is B.

Cost of Goods Sold Equals $250,000,and Average Inventory Equals $100,000