Inventory Turnover Can Be Calculated By

question 5

Multiple Choice

Inventory turnover can be calculated by:

• A)adding beginning and ending inventory; divide by two
• B)dividing the cost of goods sold by average inventory
• C)dividing average inventory by the cost of goods sold
• D)multiplying average inventory by 1.5
• E)none of the above

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Definitions:

Shortage

A situation where the demand for a product or service exceeds the available supply at a specific price point.

Surplus

A situation where the quantity of a good or service supplied exceeds the quantity demanded, typically leading to lower prices.

Quantity Supplied

The amount of a commodity that producers are willing and able to sell at a particular price over a given period of time.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price point in a certain period.