Question

Lagasse Corporation's computation of cost of goods sold is:

Beginning Inventory $160,000
Add: Cost of goods purchased 605,000
Cost of goods available for sale 765,000
Ending inventory 180,000
Cost of goods sold $585,000
The average days to sell inventory for Lagasse are a) 30 days
b) 45 days
c) 60 days
d) 75 days

Answer 1

The average days-to-sell inventory formula shows that the available choices do not match the calculated value of approximately 112.82 days when using the ending inventory. This discrepancy suggests there may be an error in the question or additional information is needed.

Step-by-step explanation:

The average days to sell inventory can be calculated by dividing the cost of goods sold by the cost of goods available for sale and multiplying by 365:

Average days to sell inventory = (Cost of goods sold / Cost of goods available for sale) * 365

In this case, the cost of goods sold is $585,000 and the cost of goods available for sale is $765,000, so the average days to sell inventory is:

Average days to sell inventory = (585,000 / 765,000) * 365 = 279.41 days

Since we're dealing with days, we round the result to the nearest whole number. Therefore, the average days to sell inventory for Lagasse Corporation is approximately 279 days.