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Akers Inc. maintains average inventory of $2,000,000 (at cost). Last year, Akers’ sales volume was $20,000,000 and cost of goods sold was $8,400,000. Akers has determined that its inventory carrying cost is 20 percent annually.
a. What was the inventory turnover rate?
Inventory turnover rate times
b. How much was the inventory carrying cost for the year?
Inventory carrying cost
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