question archive Inventory items that belong in the A category include National has 10 different items in its inventory
Inventory items that belong in the A category include National has 10 different items in its inventory
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Inventory items that belong in the A category include National has 10 different items in its inventory. The average number of units held in inventory and the average unit cost are listed for each item. The firm uses an ABC system of inventory control Invty Item Control No. Ave. No. of Units Ave. Unit Cost 5,000 P 0.05 2,000 1.50 100 8.50 500 45.00 650 3.50 10,000 100.00 5,100 0.25 3,100 5.00 20 0.75 1,150 2.00 Items 1, 6, and 7. Items 1 and 7. Items 3 and 9. Items 4 and 6.
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Answer : Items 4 & 6
Step-by-step explanation
ABC inventory system is an inventory management technique that determines the value of the inventory items based on their importance to the business.
Inventory items that belong in the A category are expensive inventory items, High-value items, and items that require accurate control.
In this problem, item 4 has an average value of 22,500 and item 6 has an average value of 1,000,000 which are high values among the rest. So the answer should be item 4 and item 6.
