If a firm's inventories on hand are $200,000 and its cost of goods sold is $600,000, what is the inventory turnover?
A) 2.0 times
B) 3.0 times
C) 4.0 times
D) 6.0 times

Question

Quizplus · Accepted Answer

Inventory turnover is calculated as Cost of Goods Sold divided by Average Inventory. Assuming the $200,000 represents average inventory, the turnover is $600,000 / $200,000 = 3.0 times.

If a Firm's Inventories on Hand Are $200,000 and Its