Based on the following information, what is the (1) inventory turnover, (2) average daily cost of goods sold using a 365-day year, and (3) days’ sales in inventory?
​

Cost of goods sold    $195,640  

Inventory:                                            

   Beginning of year                   20,500

   End of year                             18,628

​

Group of answer choices

(1) 9.9 times
(2) $543.44

(3) 36.3 days


(1) 10.5 times
(2) $536

(3) 34.8 day


(1) 9.5 times
(2) $543.44

(3) 37.7 days


(1) 10.0 times
(2) $536

(3) 36.5 days

To solve for the three values based on the given information, we will use the following formulas:

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

2. **Average Daily Cost of Goods Sold** = $ \frac{\text{Cost of Goods Sold}}{365} $

3. **Days' Sales in Inventory** = $ \frac{\text{Average Inventory}}{\text{Average Daily Cost of Goods Sold}} $

### Given:
- Cost of Goods Sold = $195,640
- Beginning Inventory = $20,500
- End of Year Inventory = $18,628

### Step 1: Calculate the Average Inventory
\[
\text{Average Inventory} = \frac{\text{Beginning Inventory} + \text{End of Year Inventory}}{2} = \frac{20,500 + 18,628}{2} = 19,564
\]

### Step 2: Calculate Inventory Turnover
\[
\text{Inventory Turnover} = \frac{195,640}{19,564} \approx 10.0 \text{ times}
\]

### Step 3: Calculate the Average Daily Cost of Goods Sold
\[
\text{Average Daily Cost of Goods Sold} = \frac{195,640}{365} \approx 536
\]

### Step 4: Calculate Days' Sales in Inventory
\[
\text{Days' Sales in Inventory} = \frac{19,564}{536} \approx 36.5 \text{ days}
\]

### Conclusion:
The correct answer based on the calculations is:
- **(1) 10.0 times**
- **(2) $536**
- **(3) 36.5 days**

This matches the option:
**(1) 10.0 times, (2) $536, (3) 36.5 days**

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Do you want more details on any step or have any questions?

### Related Questions:
1. How would the calculation change if the cost of goods sold were $250,000?
2. What impact does a higher inventory turnover have on a company’s financial performance?
3. How does the length of the year (365 vs. 360 days) affect the results for average daily cost of goods sold?
4. What does a high days’ sales in inventory ratio indicate about a company's inventory management?
5. How would a significant difference between beginning and end-of-year inventory affect the average inventory?

### Tip:
Tracking your inventory turnover regularly helps in optimizing stock levels and avoiding overstocking or stockouts.

Based on the following information, what is the (1) inventory turnover, (2) average daily cost of goods sold using a 365-day year, and (3) days’ sales in inventory?

Cost of goods sold: $195,640
Inventory:
- Beginning of year: $20,500
- End of year: $18,628

Group of answer choices:
(1) 9.9 times, $543.44, 36.3 days
(2) 10.5 times, $536, 34.8 days
(3) 9.5 times, $543.44, 37.7 days
(4) 10.0 times, $536, 36.5 days

Learn how to calculate inventory turnover, average daily cost of goods sold, and days' sales in inventory using a 365-day year. This example includes a step-by-step breakdown of the formulas used, featuring a $195,640 cost of goods sold and specific inventory figures.

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