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Question 1: Hootman Shipping has sales of $950,000 and cost of goods sold of $580,200. At the beginning of the year, the inventory was $65,200. At the end of the year, the inventory balance was $71,800. What is the inventory turnover rate? (Assume a 365-day year)
Inventory turnover rate= cost of goods sold/average inventory
Calculate average inventory rate =65,200 + 71,800 / 2 = 68500
Inventory turnover rate= 580,200 / 68500 = 8.47 times
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