Compute inventory turnover and days' sales in inventory using the provided financial data.

Steps to Solve

1. Calculate Average Inventory

To find the average inventory, use the formula:

$$ \text{Average Inventory} = \frac{\text{Beginning Inventory} + \text{Ending Inventory}}{2} $$

Given data:
Beginning Inventory = $2,200
Ending Inventory = $8,200

$$ \text{Average Inventory} = \frac{2,200 + 8,200}{2} = \frac{10,400}{2} = 5,200 $$

2. Calculate Inventory Turnover

Next, use the formula for inventory turnover:

$$ \text{Inventory Turnover} = \frac{\text{Cost of Goods Sold}}{\text{Average Inventory}} $$

Given data:
Cost of Goods Sold = $41,600
Average Inventory = $5,200

$$ \text{Inventory Turnover} = \frac{41,600}{5,200} = 8 $$

3. Calculate Days Sales in Inventory

Then, calculate the days' sales in inventory using the formula:

$$ \text{Days Sales in Inventory} = \frac{365}{\text{Inventory Turnover}} $$

From the previous step, Inventory Turnover = $8$.

$$ \text{Days Sales in Inventory} = \frac{365}{8} \approx 45.625 $$

4. Final Values

So, the values needed are:

• Inventory Turnover = 8 times
• Days Sales in Inventory ≈ 46 days (round up for practical purposes)