Allison Co. has a beginning inventory costing $90,000 and an ending inventory costing $120,000. Sales were $380,000. Assume Allison's markup rate is 40%. Based on the selling price, the inventory turnover at cost (to the nearest hundredth) is: A.None of these B.2.17 C.1.47 D.2.22 E.1.58

Inventory Turnover Ratio = (Cost of merchandise Sold / Average Inventory)Sales Revenue $3,80,000 Less: Gross Margin ($380000 * 40%) $1,52,000 Cost of merchandise Sold ($380000 - $152000) $2,28,000 Inventory, beginning of the year $90,000 Inventory, end of year $1,20,000 Average Inventory [(Inventory, beginning of the year + Inventory, end of year)/2] $1,05,000 Inventory Turnover Ratio ($228000 / $105000) 2.17 Correct answer is option B. 2.17

Answered: Allison Co. has a beginning inventory…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

Allison Co. has a beginning inventory costing $90,000 and an ending inventory costing $120,000. Sales were $380,000. Assume Allison's markup rate is 40%. Based on the selling price, the inventory turnover at cost (to the nearest hundredth) is:

A.

None of these

B.

2.17

C.

1.47

D.

2.22

E.

1.58

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions