Compute the inventory turnover from the following information: Cost of goods sold $643,825...

Question:

Compute the inventory turnover from the following information:

Cost of goods sold $643,825
Beginning inventory $87,750
Ending inventory $97,400
Goods available for sale $750,000

A company had the following ending inventory costs:

Product Units on Hand Units Cost Market Value
A 10 $5 $6
B 50 $8 $7
c 35 $10 $11

Instructions:

a) Calculate the lover of cost or market (LCM) value for the inventory as a whole.

b) Calculate the lover of cost or market (LCM) value for each individual item.

Inventory:

The inventory is the goods owned by the company at the end of a period. It is recorded as a current asset in the balance sheet. An inventory includes but not limited to raw materials, finished goods inventory and merchandise inventory.

Answer and Explanation: 1

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Inventory turnover:

The average inventory can be computes as follows:

  • Average inventory = (Beginning inventory + Ending inventory) / 2
  • Average...

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What Is Inventory? - Definition & Example

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Chapter 13 / Lesson 7
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Learn what inventory in business is. Find out three types of inventory management systems and the benefits of each. Understand inventory management through examples.


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