Question

If net sales were $52,500.00, beginning inventory at retail was $16,000.00, ending inventory at retail was $26,000.00, and cost of goods sold was $18,500.00, what was the inventory turnover ratio at retail?

Select one:
a. 1.2
b. 2.5
c. 1.3
d. 2.9

Answer 1

2.5

Explanation:

Answer 2

Option b. 2.5

Explanation:

Beginning inventory at retail = $16,000

Ending inventory at retail = $26,000

Cost of goods sold = $18,500

Net sales = $52,500

Inventory turnover =
`\frac{\text{cost of goods sold}}{\text{average inventory}}`

=
`(52,500)/(((16,000+26,000)/(2)) )`

=
`(52,500)/(21,000)`

=
`(525)/(210)`

=
`(105)/(42)`

=
`(5)/(2)`

= 2.5

Option b. 2.5 is the answer.