Question

In: Finance

Dabble, Inc., has sales of $980,000 and cost of goods sold of $640,000. The firm had...

Dabble, Inc., has sales of $980,000 and cost of goods sold of $640,000. The firm had a beginning inventory of $36,000 and an ending inventory of $46,000.

What is the length of the days’ sales in inventory? (Use 365 days a year. Round your answer to 2 decimal places. Use ending inventory rather than average inventory.)

Days' sales in inventory days   

Solutions

Expert Solution

Days Sales in Inventory (DSI) = Inventory/COGS * 365

For this question,

Inventory = $46,000 (question asks to use ending inventory)

DSI = 46,000/640,000 * 365

DSI = 26.23 days


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