Question

ABC's sales equal $60,000 and cost of goods sold equals $20,000. Its beginning inventory was $1,600 and its ending inventory is $2,400. ABC's inventory turnover ratio equals how many times a year?
A) 5 times.
B) 30 times.
C) 10 times.
D) 20 times.

Answer 1

Answer:

C) 10 times

Explanation:

Calculation to determine ABC's inventory turnover ratio equals how many times a year

Using this formula

Inventory turnover ratio =Cost of goods sold equals /Average inventory

Let plug in the formula

Inventory turnover ratio=$20,000/[($1,600+$2,400)/2]

Inventory turnover ratio=$20,000/($4,000/2)

Inventory turnover ratio=$20,000/$2,000

Inventory turnover ratio=10 times

Therefore ABC's inventory turnover ratio will equals 10 times a year

Answer 2

ABC's sales equal $60,000 and cost of goods sold equals $20,000. The, ABC's inventory turnover ratio equals to 10 times a year.

What is Inventory Turnover ratio?

Inventory turnover ration represents the total inventory that is sold, but and replaced by person. It can be calculated by dividing cost of goods sold by average inventory.

Calculation to determine ABC's inventory turnover ratio:-

Inventory turnover ratio =Cost of goods sold equals /Average inventory

Inventory turnover ratio=$20,000/[($1,600+$2,400)/2]

Inventory turnover ratio=$20,000/($4,000/2)

Inventory turnover ratio=$20,000/$2,000

Inventory turnover ratio=10 times

Therefore, correct option is C.

Learn more about inventory turnover ratio, refer to the link;

https://brainly.com/question/26172857