What is the inventory cost of an item

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Trader Bob, an organic food retail chain, operates 365 days a year. In 2007, the company turned its inventory approximately 25 times. The company’s COGS were 60% of its Sales and its annual Sales were about $7,000M that year. Assuming Trader Bob’s annual inventory holding costs are 20% (an item that cost $10 to purchase would cost $2 to hold in inventory for one year), what is the inventory cost of an item which sells for $20 and costs Trader Bob $12 to buy? Assume that this item has inventory turns of 25 per year.

Reference no: EM132233411

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