Question

Sugar, Inc. sells $938,600 of goods during the year that have a cost of $797,200. Inventory was $59,566 at the beginning of the year and $68,076 at the end of the year. How long on average does it take to sell something from inventory after it is purchased

Answer 1

Answer:

29.22 days

Explanation:

The above is an example of inventory turnover

The formula for inventory turnover

= Average inventory / Cost of goods sold × 365

Average inventory = Beginning inventory + Closing inventory / 2

= $59,566 + $68,076 / 2

= $63,821

Inventory turnover days = $63,821 / $797,200 × 365

= 29.22 days