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Exam CLTD topic 1 question 27 discussion

Actual exam question from APICS's CLTD
Question #: 27
Topic #: 1
[All CLTD Questions]

A corporation is projecting annual sales at $35 million, cost of goods sold (COGS) at $25 million, and administrative expenses at $3 million. In order to meet its corporate inventory turns goal of 5.0, their inventory level must average:

  • A. $4.4 million
  • B. $5 million
  • C. $7 million
  • D. $7.6 million.
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Suggested Answer: D 🗳️
by Paquito at Aug. 24, 2020, 11:25 p.m.

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sparkyh
7 months ago
B. Average inventory level = Annual cost of goods sold / Inventory turns goal Average inventory level = $25 million / 5.0 = $5 million
upvoted 4 times
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Aziz8903
8 months ago
=25/5=5
upvoted 4 times
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CLTD123
12 months ago
Had the exam same question today at my exam. Average inventory = Cost of goods sold / Inventory turnover, therefor answer B should be correct.
upvoted 4 times
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dailong142002
2 years, 7 months ago
Yes, I think B as the formula is Inventory turnover ratio = Cost of goods sold / Average inventory
upvoted 2 times
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Xinxinxin
2 years, 8 months ago
Nobody think $5 is the right answer???
upvoted 1 times
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