APICS CLTD Exam - Topic 1 Question 102 Discussion

Actual exam question for APICS's CLTD exam

Question #: 102
Topic #: 1

[All CLTD Questions]

A corporation is projecting annual sales at S35 million, cost of goods sold (COGS) at S25 million, and administrative expenses at $3 million. In order to meet its corporate inventory turns goal of 5.0, their inventory level must average:

A$4.4 million.

B$5 million.

C$7 million.

D$7.6 million.

Show Suggested Answer

Suggested Answer: D

by Eric at Jun 12, 2025, 04:40 PM

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Yesenia

2 months ago

Wait, how did they come up with that number? Seems off.

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Florinda

2 months ago

Definitely $7 million, no doubt about it.

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Jarvis

2 months ago

I think it’s actually $5 million. Sounds right to me!

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Derrick

3 months ago

Just to clarify, COGS is $25 million and sales are $35 million.

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Stacey

3 months ago

The average inventory level should be $7 million to hit those turns.

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Ming

3 months ago

I feel like I might be overthinking this. Wasn't there something about COGS being relevant too? I hope I don't mix that up!

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Josephine

3 months ago

If I remember correctly, the formula is sales divided by inventory. So, I guess we need to figure out the average inventory to meet the 5.0 turns.

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Samira

4 months ago

I think we practiced a similar question where we used the formula for inventory turns, but I can't recall the exact numbers we used.

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Lore

4 months ago

I remember we calculated inventory levels based on sales and turns, but I'm not sure how to apply it here.

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Leatha

4 months ago

Okay, I think I've got it. The key is to use the inventory turns formula: Inventory Turns = COGS / Average Inventory. Rearranging, we get Average Inventory = COGS / Inventory Turns. Plugging in the values, we get $25 million / 5.0 = $5 million. Option B is the answer.

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Milly

4 months ago

I'm not sure about this one. The question mentions administrative expenses, but I'm not sure how that factors into the inventory calculation. I'll need to think through the logic more carefully before selecting an answer.

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Dannie

4 months ago

This looks straightforward. If the inventory turns goal is 5.0 and the COGS is $25 million, then the average inventory level must be $25 million / 5.0 = $5 million. I'm confident that option B is the correct answer.

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Shonda

5 months ago

Hmm, I'm a bit confused on how to calculate the average inventory level from the information provided. I'll need to review the inventory turns formula and work through the math carefully.

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Barbra

5 months ago

Okay, let's think this through step-by-step. We need to find the average inventory level that would meet the corporate inventory turns goal of 5.0, given the projected annual sales and COGS.

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Jamal

7 months ago

I'm going with A) $4.4 million. It's the lowest number, so it must be the right answer. Plus, who wants to deal with all that extra inventory anyway? I say, the less the better!

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Cathrine

7 months ago

Wait, is this a trick question? I bet the answer is C) $7 million. Why? Because the corporation is clearly trying to game the system and keep their inventory levels artificially high. Gotta love corporate accounting tricks!

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Maybelle

7 months ago

I agree with you, the answer is definitely not C) $7 million. It's important to keep inventory levels in check.

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Emily

7 months ago

I think the answer is actually A) $4.4 million. The inventory level needs to be lower to meet the goal.

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Gearldine

8 months ago

D) $7.6 million looks like the correct answer to me. If the annual COGS is $25 million and the inventory turns goal is 5.0, then the average inventory level should be $25 million / 5.0 = $5 million. But they're probably rounding that up to $7.6 million to be on the safe side.

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Janessa

7 months ago

That's true, better to have a buffer than risk falling short. $7.6 million it is.

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Chanel

7 months ago

Yeah, it makes sense to round up to be safe. $5 million is the average, but $7.6 million ensures they meet their goal.

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Hollis

7 months ago

I think you're right, $7.6 million seems like the correct answer based on the calculations.

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Lennie

8 months ago

I agree with Christoper, the answer is B) $5 million because it meets the inventory turns goal of 5.0.

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Gilma

8 months ago

I disagree, I believe the answer is C) $7 million.

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Christoper

8 months ago

I think the answer is B) $5 million.

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Gayla

8 months ago

I think the answer is B) $5 million. The corporation's inventory level must be set to achieve the desired inventory turns goal of 5.0, which means the average inventory level should be one-fifth of the annual COGS, which is $25 million. So $5 million seems like the right answer.

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Stefania

8 months ago

Yes, $5 million is the average inventory level needed to meet the corporate inventory turns goal of 5.0.

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Gerald

8 months ago

That makes sense, $5 million is the right answer to achieve the desired inventory turns goal of 5.0.

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Reita

8 months ago

I agree, the inventory level should be one-fifth of the annual COGS, which is $25 million. So $5 million seems correct.

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