Cash sales Rs 80 000 Credit sales Rs 2 00 000 Return inwards Rs 10 000 Opening Stock Rs 25 000 Closi...........

Costing - Phase (I & II) Methods of Costing

Cash sales: Rs. 80,000

Credit sales: Rs. 2,00,000/-

Return inwards: Rs. 10,000

Opening Stock: Rs. 25,000/-

Closing Stock: Rs. 30,000/-

Gross Profit: 25%

Inventory turnover ratio will be:

7.36 times

8.36 times

9.36 times

None of the above

Inventory Turnover Ratio= Cost of Goods sold/Average Inventory at Cost

Net sales= 80,000 + 2,00,000 – 10,000= Rs. 2,70,000/-

Cost of goods sold= Net sales – Gross Profit

= 2,70,000 – 67,500= 2,02,500/-

Average inventory= 25000 + 30,000/2= 27,500/-

Inventory turnover ratio=2,02,500/27,500= 7.36 times

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