A large catalog retailer of fashin apparel reported 100 million in revenues over the last year. On average, over the same year, the company had 5 million worth of inventory in their warehouses. Assume that units in inventory are valued based on COGS and that the retailer has a 100 percent markup on all products.
A. How many times each year does the retailer turn its inventory? THe company uses a 40 percent per year cost of inventory. THat is the hypothetical case that one item of $100 cogs would sit eactly one year in inventory., the company charges itself 40 dollars inventory cost.
B. What is the inventory cost for a $30 COGS item? You may assume that inventory turns are dependent of price.