Tech Company is a medium-sized consumer electronics retailer. The company reported $155,000,000 in revenues for 2007 and $110,050,000 in Costs of Goods Sold (COGS). In the same year, Tech Co. held an average of $20,000,000 in inventory. Inventory cost at Tech Co. is 35 percent per year. What is the per unit inventory cost (in dollars) for an MP3 player sold at $50? Assume that the margin corresponds to the retailer’s average margin

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A: The formula to compute days sales in inventory as follows:

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A: Total sales = Gh 1000 Type A sales = 60%

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A: SOLUTION-   COST OF GOOD SOLD = OPENING STOCK + PURCHASE + DIRECT EXPENSE - CLOSING STOCK.

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A: Inventory valuation is the technique using which the inventory in the entity can be determined.

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Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.