If the opening stock is Le200, cost of goods sold Le2,400, and closing stock Le120, then the rate of turnover is

Assessment: WAEC SSCE - Commerce - 2007 (Objective) Subject: Commerce

Question 1 Report

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.
Read lesson note on Production (WAEC)
Read lesson note on Purchase And Sale Of Goods (JAMB)
Read lesson note on Commerce (JAMB)
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