A7X Corporation has ending inventory of $625,817, and cost of goods sold for the year just ended was $9,758,345. a. What is the inventory turnover? (Do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.) b. What is the days’ sales in inventory? (Do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.) c. How long on average did a unit of inventory sit on the shelf before it was sold? (Do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.)

a. 15.59 times

b. 23.41 days

c. The unit took 23.41 days on the shelf before it was sold.

Explanation:

Inventory turnover is the ratio that how many time a business has sold or replaced the inventory during a given period. A business is considered more profitable if it has high inventory turnover.

According to given data

Ending Inventory = $625,817

Cost of Goods Sold = $9,758,345

Inventory turnover = Cost of Goods Sold  / Average Inventory value

As Beginning Inventory value is not given, we will use the Ending Inventory Balance instead Average Inventory value.

Inventory turnover = $9,758,345  / $625,817 = 15.59 times

Days Sales In Inventory = 365 x Ending Inventory / Cost of Goods Sold

Days Sales In Inventory = 365 x $625,817 / $9,758,345 = 23.41 days

The unit took 23.41 days on the shelf before it was sold