Answer:
- The inventory turnover for the year is 10 .
Explanation:
The inventory turn over for a year is the number of times the inventory has been sold over the year:
[tex]\text{Inventory turn over }=\dfrac{\text{Cost of goods sold}}{\text{Average inventory}}[/tex]
The average inventory is:
[tex]\text{Average inventory }=\dfrac{\text{Beginning inventory + Ending inventory}}{2}[/tex]
Thus, from the financial data in the table for The Tampa Manufacturing Company, at Decermber 31, the inventory turnover for the year is:
[tex]\text{Average inventory }=\dfrac{\text{\$ 55,000 + \$ 45,000}}{2}=\$ 50,000[/tex]
[tex]\text{Inventory turn over }=\dfrac{\text{\$500,000}}{\text{\$50,000}}=10[/tex]
