Use the following information: Net sales Cost of goods sold $235,000 168,000 52,000 42,000 Beginning inventory Ending inventory a. Calculate the inventory turnover ratio. b. Calculate the average days in inventory. c. Calculate the gross profit ratio.

Use the following information: Net sales Cost of goods sold $235,000 168,000 52,000 42,000 Beginning inventory Ending inventory a. Calculate the inventory turnover ratio. b. Calculate the average days in inventory. c. Calculate the gross profit ratio.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter10: Inventory

Section: Chapter Questions

Problem 15PB: Use the following information relating to Singh Company to calculate the inventory turnover ratio...

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Concept explainers

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit. Overhead expenses depend upon the nature of the business operations.

Question

Use the following information:
Net sales
Cost of goods sold
$235,000
168,000
52,000
42,000
Beginning inventory
Ending inventory
a. Calculate the inventory turnover ratio.
b. Calculate the average days in inventory.
c. Calculate the gross profit ratio.

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