Kraers Inc.keeps an average of 200 finished widgets in inventory each month,and it sold 2000 widgets this year.Therefore,the inventory turnover of the company is:
A) 10.
B) 20.
C) 100.
D) 200.

Question

Kraers Inc.keeps an average of 200 finished widgets in inventory each month,and it sold 2000 widgets this year.Therefore,the inventory turnover of the company is: 
A) ​10. 
B) ​20. 
C) ​100. 
D) ​200.

Quizplus · Accepted Answer

Inventory turnover is calculated by dividing the cost of goods sold (or sales) by the average inventory. Here, 2000 widgets sold divided by 200 average inventory equals an inventory turnover of 10.