Calculate the Average Inventory and Inventory Turnover

Essay

Calculate the average inventory and inventory turnover. If the actual turnover is below the published rate, calculate the target average inventory necessary to come up to industry standards, rounding to the nearest tenth: $$\begin{array} { l l l } \text { Cost of Goods Sold } & \text { B eginning Inventory } & \text { Ending Inventory } \\\hline \$ 506,000 & \$ 28,000 & \$ 32,000 \\\$ 183,000 & \$ 25,600 & \$ 28,000 \\\$ 6,520,000 & \$ 1,565,000 & \$ 1,590,000 \\\$ 1,260,000 & \$ 115,000 & \$ 90,000\end{array}$$ $$\begin{array} { l l l l l } & \text { Average } & \text { Inventory } \\\text { Inventory } & \text { Turnover } & \begin{array} { l } \text { Published } \\\text { Rate }\end{array} & \begin{array} { l } \text { Target Average } \\\text { Inventory }\end{array} \\\hline \text { a. } & & 14.3 & \\\text { b. } & & 7.5 & \\\text { c. } & & 5.0 & \\\text { d. } & & 18.0 &\end{array}$$