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ABC Analysis Stock Number Annual $ Volume Percent of Annual $ Volume J24 12,500 46.2 R26 9,000 33.3 L02 3,200 11.8 M12 1,550 5.8 P33 620 2.3 T72 65 0.2 S67 53 0.2 60 Q47 32 0.1 10 V20 30 0.1 Σ = 100.0

ABC Analysis Stock Number Annual $ Volume Percent of Annual $ Volume J24 12,500 46.2 R26 9,000 33.3 L02 3,200 11.8 M12 1,550 5.8 P33 620 2.3 T72 65 0.2 S67 53 0.2 60 Q47 32 0.1 10 V20 30 0.1 Σ = 100.0

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Class C items usually represent only a small amount of the annual dollar volume spent on inventory, only about 5%, but are the majority of items, about 55% of all the items stocked. These are only guideline and the exact amounts will change for different situations, but we are looking for the trivial many items, meaning the large number of items that cost only a small amount of the total annual cost of all inventory. Managing inventory is expensive and so we look for items where we spend less on managing these items in inventory (forecasting, inventory controls, cycle counting, etc). For instance, a small amount of additional safety stock may be less costly than the close managing of the item through supplier management, inventory controls, and cycle counting. With the small amount of items that we have in problems like this we don't always see the exact guidelines given above. From the information we have what are the least costly items, usually there will be quite a few? From the options below, select ALL of the inventory stock numbers (items) that would be classified as C items during an ABC analysis (see problem from download in previous step): Note: points off for incorrect answers ☐ U ☐ T72 R26 M12 Q47 V20
Transcribed Image Text:Class C items usually represent only a small amount of the annual dollar volume spent on inventory, only about 5%, but are the majority of items, about 55% of all the items stocked. These are only guideline and the exact amounts will change for different situations, but we are looking for the trivial many items, meaning the large number of items that cost only a small amount of the total annual cost of all inventory. Managing inventory is expensive and so we look for items where we spend less on managing these items in inventory (forecasting, inventory controls, cycle counting, etc). For instance, a small amount of additional safety stock may be less costly than the close managing of the item through supplier management, inventory controls, and cycle counting. With the small amount of items that we have in problems like this we don't always see the exact guidelines given above. From the information we have what are the least costly items, usually there will be quite a few? From the options below, select ALL of the inventory stock numbers (items) that would be classified as C items during an ABC analysis (see problem from download in previous step): Note: points off for incorrect answers ☐ U ☐ T72 R26 M12 Q47 V20
ABC Analysis Stock Number Annual $ Volume Percent of Annual $ Volume J24 12,500 46.2 R26 9,000 33.3 L02 3,200 11.8 M12 1,550 5.8 P33 620 2.3 T72 65 0.2 S67 53 0.2 Q47 32 0.1 V20 30 0.1 Σ = 100.0
Transcribed Image Text:ABC Analysis Stock Number Annual $ Volume Percent of Annual $ Volume J24 12,500 46.2 R26 9,000 33.3 L02 3,200 11.8 M12 1,550 5.8 P33 620 2.3 T72 65 0.2 S67 53 0.2 Q47 32 0.1 V20 30 0.1 Σ = 100.0
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