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

2016 2015 Cost of merchandise 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 2016 and 2015.

b. Determine the number of days’ sales in inventory for 2016 and 2015. Use 365 days and round to one decimal place.

c. Does the change in inventory turnover and the number of days’ sales in inventory from 2015 to 2016 indicate a favorable or an unfavorable trend?