Question

Stoney Brooke, Inc. has sales of $1,030,000 and cost of goods sold of $811,800. The firm had a beginning inventory of $42,000 and an ending inventory of $57,000. What is the length of the inventory period?

a.21.95 days
b.22.26 days
c.18.63 days
d.17.54 days
e.18.88 days

Answer 1

The length of the inventory period is approximately 44.57 days.

Step-by-step explanation:

The length of the inventory period can be determined using the formula:

Inventory Period = (Average Inventory / Cost of Goods Sold) x 365 days

First, we need to calculate the average inventory:

Average Inventory = (Beginning Inventory + Ending Inventory) / 2

Substituting the given values into the formula:

Average Inventory = ($42,000 + $57,000) / 2 = $99,500

Next, we can calculate the inventory period:

Inventory Period = ($99,500 / $811,800) x 365 days = 44.57 days

Therefore, the length of the inventory period is approximately 44.57 days.