Answer (D) is correct . The average days to sell inventory equals 365 days divided by the inventory turnover (cost of goods sold ¡Â average inventory). Thus, turnover is 5.0345 times {$4,380,000 COGS ¡Â [($960,000 + $780,000) ¡Â 2]}. Average days to sell inventory is 72.5 days (365 ¡Â 5.0345).
Answer (A) is incorrect because The number of 51.18 days is based on sales, not cost of sales. Sales are recorded at retail prices.
Answer (B) is incorrect because The number of 65.00 days is based on the beginning inventory.
Answer (C) is incorrect because The number of 71.51 days is based on a 360-day year, not a 365-day year.
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Volpone Company’s average number of days to sell inventory for Year 2 is