Question

Compute the stock turnover in dollars for a product that has sales of $6,000 and an average value of inventory investment of $1,500.

Answer 1

Answer: 4

Explanation:

Given: Cost of product sold = $6,000

Average value of inventory= $1,500

We know that the inventory turnover formula is given by :-

`\text{Inventory turnover}=\frac{\text{ Cost of product sold}}{\text{Average value of inventory}}`

`\\\Rightarrow\ \text{Inventory turnover}=(\$6,000 )/(\$1500)\\\\\Rightarrow\ \text{Inventory turnover}=4`

Therefore, the stock turnover for a product that has sales of $6,000 and an average value of inventory investment of $1,500 = 4

Answer 2

Question: It should be inventory turnover.

Solution:
Inventory turnover = Cost of goods sold/Average inventory

Substituting the values given for cost of goods and average inventory;
Inventory turnover = 6,000/1,500 = 4