Determine the inventory turnover and days in inventory for 2011 and 2012. Discuss the changes in the…

Early in 2012, Westmoreland Company switched to a just-in-time inventory system. Its sales, cost of goods sold, and inventory amounts for 2011 and 2012 are shown below.

2011

2012

Sales revenue

$2,000,000

$1,800,000

Cost of goods sold

1,000,000

910,000

Beginning inventory

290,000

210,000

Ending inventory

210,000

50,000

Determine the inventory turnover and days in inventory for 2011 and 2012. Discuss the changes in the amount of inventory, the inventory turnover and days in inventory, and the amount of sales across the two years.