Inventory Turnover and Days' Sales in Inventory

Financial statement data for years ending December 31 for Tango Company follows:

	20Y7				20Y6
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 20Y7 and 20Y6. Round to one decimal place.

	Inventory Turnover
20Y7
20Y6

b. Determine the days' sales in inventory for 20Y7 and 20Y6. Assume 365 days a year. Round interim calculations and final answers to one decimal place.

	Days' Sales in Inventory
20Y7	days
20Y6	days

c. Does the change in inventory turnover and the days' sales in inventory from 20Y6 to 20Y7 indicate a favorable or an unfavorable trend? Unfavorable