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WAEC Commerce 2023 Question 26

Question 26

Business Calculations

If opening and closing inventories of a business are D500 and D300 respectively and cost of sales is D1,200, rate of turnover will be

  1. A.4.0 times.
  2. B.3.0 times
  3. C.2.4 times
  4. D.1.5 times.
Show the answer and explanation

Answer: B (3.0 times)

Explanation

Average inventory = (500 + 300) ÷ 2 = D400. Rate of turnover = cost of sales ÷ average inventory = 1,200 ÷ 400 = 3 times.