If the opening stock is Le200, cost of goods sold Le2,400, and closing stock Le120, then the rate of turnover is
Answer Details
To calculate the rate of turnover, we need to divide the cost of goods sold by the average inventory.
The average inventory is the sum of the opening and closing stock divided by two.
So, the average inventory = (200 + 120) / 2 = 160
The cost of goods sold is given as Le2,400.
Therefore, the rate of turnover = 2,400 / 160 = 15 times.
This means that the company sold its entire inventory 15 times during the period.