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Business
Accounting
Item Annual Unit Item Annual Unit Number Usage Cost Number Usage Cost 1 36 $350 16 60 $610 2 510 30 17 120 20 3 50 23 18 270 15 4 300 45 19 45 50 5 18 1900 20 19 3200 6 500 21 910 3 7 710 22 12 4750 8 80 26 23 30 2710 9 344 28 24 24 1800 10 67 440 25 870 105 11 510 2 26 244 30 12 682 35 27 750 15 13 95 50 28 45 110 14 10 3 29 46 160 15 820 1 30 165 25

Item Annual Unit Item Annual Unit Number Usage Cost Number Usage Cost 1 36 $350 16 60 $610 2 510 30 17 120 20 3 50 23 18 270 15 4 300 45 19 45 50 5 18 1900 20 19 3200 6 500 21 910 3 7 710 22 12 4750 8 80 26 23 30 2710 9 344 28 24 24 1800 10 67 440 25 870 105 11 510 2 26 244 30 12 682 35 27 750 15 13 95 50 28 45 110 14 10 3 29 46 160 15 820 1 30 165 25

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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Question

The Aztec Company stocks a variety of parts and materi-
als it uses in its manufacturing processes. Recently, as de-
mand for its finished goods has increased, management

has had difficulty managing parts inventory; they fre-
quently run out of some crucial parts and seem to have an

endless supply of others. In an effort to control inventory

more effectively, they would like to classify their inven-
tory of parts according to the ABC approach. Following

is a list of selected parts and the annual usage and unit
value for each:Classify the inventory items according to the ABC ap-
proach using dollar value of annual demand.

Item Annual Unit Item Annual Unit Number Usage Cost Number Usage Cost 1 36 $350 16 60 $610 2 510 30 17 120 20 3 50 23 18 270 15 4 300 45 19 45 50 5 18 1900 20 19 3200 6 500 21 910 3 7 710 22 12 4750 8 80 26 23 30 2710 9 344 28 24 24 1800 10 67 440 25 870 105 11 510 2 26 244 30 12 682 35 27 750 15 13 95 50 28 45 110 14 10 3 29 46 160 15 820 1 30 165 25
Transcribed Image Text:Item Annual Unit Item Annual Unit Number Usage Cost Number Usage Cost 1 36 $350 16 60 $610 2 510 30 17 120 20 3 50 23 18 270 15 4 300 45 19 45 50 5 18 1900 20 19 3200 6 500 21 910 3 7 710 22 12 4750 8 80 26 23 30 2710 9 344 28 24 24 1800 10 67 440 25 870 105 11 510 2 26 244 30 12 682 35 27 750 15 13 95 50 28 45 110 14 10 3 29 46 160 15 820 1 30 165 25
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