Reference no: EM131119823
Palmer Chocolates, a maker of chocolates that specializes in Easter candy, had the following inventories over the past year:
Month Inventory Amount
January ......... $25,000,000
February ......... 60,000,000
March ......... 90,000,000
April ......... 30,000,000
May ......... 20,000,000
June ......... 22,000,000
July ......... 25,000,000
August ......... 38,000,000
September ......... 50,000,000
October ......... 60,000,000
November ......... 70,000,000
December ......... 30,000,000
Palmer had sales of $290 million over the past year. Cost of sales constituted 50 percent of sales. Calculate Palmer's inventory turnover using beginning of year inventory, end of year inventory, and a monthly average inventory. Which method do you feel is most appropriate? Why?
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