Suppose at December 31 of a recent year, the following information (in thousands

Question

Suppose at December 31 of a recent year, the following information (in thousands) was available for sunglasses manufacturer Oakley Inc.: ending inventory $169,518; beginning inventory $109,174; cost of goods sold $381,169 and sales revenue $768,343. Calculate the inventory turnover for Oakley, Inc. (Round inventory turnover to 2 decimal places, e.g. 5.12.) Inventory turnover times SHOW LTST OF ACCOUNTS INTERACTIVE TUTORIAL Calculate the days in inventory for Oakley, Inc. (Round days in inventory to 0 decimal places, e.g. 125.) Days in inventory days

Explanation / Answer

Inventory Turnover =Cost of goods Sold / Average Inventory

= Cost of Goods Sold / [(Beginning Inventory + Ending Inventory) /2]

= $ 381,169 / [ ( 169,518+ 109,174) /2 ]

= 2.735414005 times

Hence the correct answer is 2.74 times

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Days in Inventory = Number of Days in A year / Inventory turnover

= 365/2.735414005 times

= 133.4350118

Hence the correct answer is 133 days

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