Answer:
Days in inventory is 66 days
Explanation:
The formula for days in inventory is 365 days/inventory turnover while inventory turnover is costs of good sold divided by average inventory.
costs of goods sold is $550,000
average inventory is ($90,000+$110,000)/2=$100,000
inventory turnover =$550,000/$100000
inventory turnover =5.5 times
The days in inventory can then be computed thus:
days in inventory=365 days/5.5=66.36 days
The days in inventory is the average number of days that it took inventory to be sold and it is approximately 66 days in this instance
