Question

What was the cost of goods sold for Lunar Company, if the days in inventory ratio was 73 days, and the average inventory was $125,000 for the most recent fiscal year

Answer 1

The cost of goods sold for Lunar Company, if the days in inventory ratio was 73 days is:$625,000.

Cost of goods sold

Using this formula

Cost of goods sold=365 day/Days in inventory ratio ×Average inventory

Where:

Days in inventory ratio=73 days

Average inventory=$125,000

Let plug in the formula

Cost of goods sold=365/73 days×$125,000

Cost of goods sold=$625,000

Inconclusion the cost of goods sold for Lunar Company, if the days in inventory ratio was 73 days is:$625,000.

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