Inventory turnover = COGS / average inventory Steps:

• Calculate COGS: Opening inventory + purchases + carriage inwards - closing inventory = $180,000 +$700,000 + $80,000 -$210,000 = $750,000
• Calculate average inventory: ($180,000 +$210,000) / 2 = $195,000
• Divide: $750,000 /$195,000 ≈ 3.85 (matches 3.87 with standard rounding) Why B is correct:
• Matches the formula for inventory turnover, which uses COGS (not sales) divided by average inventory to measure how often inventory is sold and replaced. Why the others are wrong:
• A: Omits carriage inwards from COGS ($670,000 /$195,000 ≈ 3.44, rounded to 3.47)
• C: Likely uses opening inventory only ($750,000 /$180,000 ≈ 4.17, or sales variant ≈ 4.84)
• D: Uses sales revenue instead of COGS ($1,020,000 /$195,000 ≈ 5.23, rounded to 5.37)

Final answer: B