The King Corporation has ending inventory of $483,824, and cost of goods sold for the year just ended was $4,233,460. a. What is the inventory turnover? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.) b. What is the days' sales in inventory? (Use 365 days a year. Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.) c. How long on average did a unit of inventory sit on the shelf before it was sold? (Use 365 days a year. Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.)

Respuesta :

Answer:

a. 8.75 times

b. 41.71 days

c. 41.71 days

Explanation:

The computation is shown below:

a. Inventory Turnover = Cost of Goods Sold ÷  Inventory

                                    = $4,233,460 ÷ $483,824

                                    =  8.75 times

b. Days' sales in inventory = 365 ÷ Inventory Turnover

                                            = 365 ÷ 8.75 times

                                            = 41.71 days

c. Number of days for the unit of inventory sit on the shelf would be equal to the days' sales in inventory i.e 41.71 days