Question

With net sales of $30,000, beginning inventory at retail of $12,000, ending inventory at retail of $10,000, and cost of goods sold $15,000, what's the inventory turnover at retail rounded to the nearest hundredth?

Answer 1

3 thousand is the answer

Answer 2

The inventory turnover at retail is calculated by dividing the cost of goods sold by the average inventory at retail. Using the given figures, the inventory turnover at retail is 1.36 when rounded to the nearest hundredth.

Step-by-step explanation:

The question asks for the calculation of inventory turnover at retail, which is an important metric in business to measure how quickly a company sells its inventory. To calculate it, we use the following formula:

Inventory Turnover = Cost of Goods Sold / Average Inventory at Retail

First, we need to find the average inventory at retail, which is done by adding the beginning inventory to the ending inventory and then dividing by two:

Average Inventory at retail = (Beginning Inventory at Retail + Ending Inventory at Retail) / 2
= ($12,000 + $10,000) / 2
= $22,000 / 2
= $11,000

Now, we can calculate the inventory turnover at retail:

Inventory Turnover at Retail = Cost of Goods Sold / Average Inventory at Retail
= $15,000 / $11,000
= 1.36 (rounded to the nearest hundredth)

This means the inventory was turned over approximately 1.36 times during the period.