Inventory turnover and number of days’ sales in inventory Obj. 7 Financial statement data for years ending December 31 for Tango Company follow:

20Y7 20Y6 Cost of goods sold $3,864,000 $4,001,500 Inventories:

Beginning of year 770,000 740,000 End of year 840,000 770,000

a. Determine the inventory turnover for 20Y7 and 20Y6.

b. Determine the number of days’ sales in inventory for 20Y7 and 20Y6. Use 365 days and round to one decimal place.

c. Are the changes in inventory turnover and the number of days’ sales in inventory from 20Y6 to 20Y7 favorable or unfavorable?

AppendixLO1