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6 April, 06:53

For the current year, Delta Corporation has beginning and ending inventories of $80,000 and $100,000, respectively. Cost of goods sold for the year is $450,000. What is the company's average days in inventory?

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  1. 6 April, 07:28
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    The average days in inventory are 5 days

    Explanation:

    The average days in inventory is computed or evaluated as:

    Average days in inventory = COGS (Cost Of Goods Sold) / Average Inventories

    where

    COGS (Cost Of Goods Sold) amounts to $450,000

    Average Inventories is computed as:

    Average Inventories = Beginning Inventory + Ending Inventory / 2

    where

    Beginning Inventory amounts to $80,000

    Ending Inventory amounts to $100,000

    Putting the values:

    Average Inventories = $80,000 + $100,000 / 2

    = $180,000 / 2

    Average Inventories = $90,000

    Now, putting the values above in the formula:

    Average days in inventory = $450,000 / $90,000

    = 5 days
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Home » Business » For the current year, Delta Corporation has beginning and ending inventories of $80,000 and $100,000, respectively. Cost of goods sold for the year is $450,000. What is the company's average days in inventory?
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