Question

Concord Corporation had the following records:

2017 2016
Ending inventory $37650
$39490
Cost of goods sold 235600 226490

What is Concord average days in inventory for 2017? (rounded) (Use 365 days for calculation.)

Answer 1

Inventory days for 2017 = 60 days

Step-by-step explanation:

Inventory days =
`(365)/(Inventory\ Turnover)`

For this, firstly we will calculate average inventory.

Average Inventory =
`(Starting\ Inventory + Closing\ Inventory)/(2)`

Here, starting inventory = $39,490

Closing inventory = $37,650

Average Inventory =
`(39,940 + 37,650)/(2) = 38,795`

Inventory Turnover =
`(Cost\ of\ goods\ sold)/(Average\ Inventory)`

=
`(235,600)/(38,795) = 6.0729`

Inventory days =
`(365)/(6.0729) = 60.10`

Rounded inventory days = 60 days.