BXY Enterprise has the following balance at the end of march 2010 opening stock D6,000 purchases D23,000 salaries and wages D12,000 closing stock D8,000 sal...

Use the information above to answer the following question.

what is the rate of turnover by BYX Enterprise

Answer Details

The rate of turnover refers to the number of times a company's inventory is sold and replaced within a given period. It is calculated by dividing the cost of goods sold by the average inventory value. Using the information provided, we can calculate the cost of goods sold by subtracting the closing stock of D8,000 from the cost of goods available for sale (opening stock + purchases) of D29,000. Cost of goods sold = D29,000 - D8,000 = D21,000 To find the average inventory value, we add the opening and closing stock values and divide by 2. Average inventory value = (D6,000 + D8,000)/2 = D7,000 Now we can calculate the rate of turnover by dividing the cost of goods sold by the average inventory value. Rate of turnover = Cost of goods sold / Average inventory value = D21,000 / D7,000 = 3 times Therefore, the rate of turnover by BYX Enterprise is 3 times.