Question

Sugar, Inc. sells $938,600 of goods during the year that have a cost of $797,200. The balance in Inventory was $59,566 at the beginning of the year and $68,076 at the end of the year.How long on average does it take to sell something from inventory after it is purchased?

Answer 1

Answer:

inventory turnover days =29.22 days

Explanation:

The inventory turnover period is the average length of time it takes to sell a stock item after it has been purchased.

It is calculated as = average inventory/ cost of goods sold × 365 days

29.22060336

Average inventory =(Inventory at the beginning + inventory at the end)/2

=(59,566 + 68,076 )/2

= 63,821

Inventory turnover days

= (63821/797,200) × 365 days

=29.22 days

THis implies that it takes sugar Inc about 29 days to sell its goods after they have been purchased