Which of the following best defines inventory turnover? It is the time taken to

Question

Which of the following best defines inventory turnover? It is the time taken to fill a customer's order. It is a measure of how quickly goods are moving through the supply chain. It is a measure of the number of perfect orders. It is the cost associated with repairs of goods that have been returned. If an online retail store has cost of goods sold equal to $2 million, has 200 operating days in a year, and has a total average on-hand inventory of $500,000, the cost of goods sold per day is _____. $ 10,000 $ 7,500 $ 2,500 $ 15,000

Explanation / Answer

10. B is the right answer. The answer can be had from the below definition of Inventory Turnover

The Inventory turnover is a measure of the number of timesinventory is sold or used in a time period such as a year. The equation forinventory turnover equals the cost of goods sold or net sales divided by the average inventory.

11. A is the right answer. This' how :

COGS per day = CSG/D = Cost of goods sold value/ ops days per day
=$2000000/200days
=$10,000

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