Inventory Holding Period

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jmh
jmh Registered Posts: 42
in Management Accounting: Decisions and Control
I have the attached question about calculating inventory holding period and i can't get to the answer. The answer is 148 days, my answer is 147. I have calculated the average inventory first.

Thank you for looking.

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  • dumutroba
    dumutroba Registered Posts: 262
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    Not sure why you are getting 147
    My calculation would be inventory 395200+405600/2=400400
    COS=OP+Purchases-CI = 395200+995250-405600=984850
    Inventory holding period = Inventory/COSx 365=400400/984850*365=148 days
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  • jmh
    jmh Registered Posts: 42
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    ah I know now where I was going wrong....I did the inventory calculation correctly but the cost of sales i did wrong.

    Thank you very much.

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