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Class A items usually represent about 70-80% of the annual dollar volume (cost), but are only 15-20% of the items. These are only guideline and the exact amounts will change for different situations, but we are looking for the critical few items, meaning the small number of items that cost the most from an annual perspective. We must take the most care with managing these items in inventory (forecasting, inventory controls, cycle counting, supplier management, etc) because the mismanagement is very costly. Consider which items are the few, most costly, from the information given. From the options below, select ALL of the inventory stock numbers (items) that would be classified as A items during an ABC analysis (see problem from download in previous step): Note: points off for incorrect answers J24 R26 ☐ M12 P33 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

Class A items usually represent about 70-80% of the annual dollar volume (cost), but are only 15-20% of the items. These are only guideline and the exact amounts will change for different situations, but we are looking for the critical few items, meaning the small number of items that cost the most from an annual perspective. We must take the most care with managing these items in inventory (forecasting, inventory controls, cycle counting, supplier management, etc) because the mismanagement is very costly. Consider which items are the few, most costly, from the information given. From the options below, select ALL of the inventory stock numbers (items) that would be classified as A items during an ABC analysis (see problem from download in previous step): Note: points off for incorrect answers J24 R26 ☐ M12 P33 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

Survey of Accounting (Accounting I)
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter15: Capital Investment Analysis
Section: Chapter Questions
Problem 15.2.1MBA
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Class A items usually represent about 70-80% of the annual dollar volume (cost), but are only 15-20% of the items. These are only guideline and the exact amounts will change for different situations, but we are looking for the critical few items, meaning the small number of items that cost the most from an annual perspective. We must take the most care with managing these items in inventory (forecasting, inventory controls, cycle counting, supplier management, etc) because the mismanagement is very costly. Consider which items are the few, most costly, from the information given. From the options below, select ALL of the inventory stock numbers (items) that would be classified as A items during an ABC analysis (see problem from download in previous step): Note: points off for incorrect answers J24 R26 ☐ M12 P33 V20
Transcribed Image Text:Class A items usually represent about 70-80% of the annual dollar volume (cost), but are only 15-20% of the items. These are only guideline and the exact amounts will change for different situations, but we are looking for the critical few items, meaning the small number of items that cost the most from an annual perspective. We must take the most care with managing these items in inventory (forecasting, inventory controls, cycle counting, supplier management, etc) because the mismanagement is very costly. Consider which items are the few, most costly, from the information given. From the options below, select ALL of the inventory stock numbers (items) that would be classified as A items during an ABC analysis (see problem from download in previous step): Note: points off for incorrect answers J24 R26 ☐ M12 P33 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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