Question

Suppose Maestro'sMaestro's had cost of goods sold during the year of $ 230 comma 000$230,000. Beginning merchandise inventory was $ 35 comma 000$35,000​, and ending merchandise inventory was $ 45 comma 000$45,000. Determine Maestro'sMaestro's inventory turnover for the year. Round to the nearest hundredth.

Answer 1

The answer is: Maestro's inventory turnover was 5.75 times

Step-by-step explanation:

In order to find the inventory turnover we use the following formulas:

• Inventory turnover = COGS / Average inventory
• Average inventory = (beginning inventory + ending inventory) / 2

First we find the average inventory:

• Average inventory = ($35,000 + $45,000) / 2 = $40,000

Now we can calculate the inventory turnover:

• Inventory turnover = $230,000 / $40,000 = 5.75 times