A restaurant has annual sales of$417000, an average inventory of $8250, and an annual cost of goodssold of $273000.(Round your answer to 2 decimalplaces.)What is the restaurant’smonthly inventory turns?
Expert Answer
Solution:
Inventory turns is calculatedas,
Inventory turns = Annual cost ofgoods sold / Average inventory
Inventory turns = $273000 /$8250
Inventory turns = 33.09
Monthly inventory turns = Inventoryturns / Number of months in a year
Monthly inventory turns = 33.09 /12
Monthly inventory turns =2.76