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14 April, 20:42

Sugar, Inc. sells $938,600 of goods during the year that have a cost of $797,200. The balance in Inventory was $59,566 at the beginning of the year and $68,076 at the end of the year. How long on average does it take to sell something from inventory after it is purchased?

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  1. 14 April, 21:08
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    inventory turnover days = 29.22 days

    Explanation:

    The inventory turnover period is the average length of time it takes to sell a stock item after it has been purchased.

    It is calculated as = average inventory / cost of goods sold * 365 days

    29.22060336

    Average inventory = (Inventory at the beginning + inventory at the end) / 2

    = (59,566 + 68,076) / 2

    = 63,821

    Inventory turnover days

    = (63821/797,200) * 365 days

    =29.22 days

    THis implies that it takes sugar Inc about 29 days to sell its goods after they have been purchased
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