The cost of goods sold computations for Alpha Company and Omega Company are shown below.
|
Alpha Company |
Omega Company |
|
|
Beginning inventory |
$ 45,000 |
$ 71,000 |
|
Cost of goods purchased |
200,000 |
290,000 |
|
Cost of goods available for sale |
245,000 |
361,000 |
|
Ending inventory |
55,000 |
69,000 |
|
Cost of goods sold |
$190,000 |
$292,000 |
Instructions
(a) Compute inventory turnover and days in inventory for each company.
(b) Which company moves its inventory more quickly?