Mario's Home Systems has sales of $2,860, costs of goods sold of $2,200, inventory of $512, and accounts receivable of $434. How many days, on average, does it take Mario's to sell its inventory?

Question

Vanessa Rangel

Business

27 September, 16:28

Mario's Home Systems has sales of $2,860, costs of goods sold of $2,200, inventory of $512, and accounts receivable of $434. How many days, on average, does it take Mario's to sell its inventory?

+5

Answers (1)

Know the Answer?

Yusuf Haley · Answer 1

84.95 days

Explanation:

Given that

Sales = 2860

Cost = 2200

Inventory = 512

Account receivable = 434

Firstly, we calculate the inventory turnover

Recall that,

Inventory turnover = Cost of goods sold : average inventory

Thus,

Inventory turnover = 2200 : 512

= 4.296875

Secondly we divide the number of days in a year (365) by the turnover

Therefore,

Days taken to sell inventory = 365 : 4.296876

= 84.945 days

= 84.95 days