Bowring Ball Bearings 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.
$$\begin{array} { l r r }
& \text { Average Number of Units } & \text { Average Unit Cost } \
1 & 5,000 & \$ 0.05 \
2 & 2,000 & 1.50 \
3 & 100 & 8.50 \
4 & 500 & 45.00 \
5 & 650 & 3.50 \
6 & 10,000 & 100.00\
7 & 5,100 & 0.25 \
8 & 3,100 & 5.00 \
9 & 20 & .75 \
10 & 1,150 & 2.00
\end{array}$$
-Inventory items that belong in the A category include
A) Items 1, 6, and 7
B) Items 1 and 7
C) Items 3 and 9
D) Items 4 and 6

Question

Bowring Ball Bearings 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.
$$\begin{array} { l r r } 
& \text { Average Number of Units } & \text { Average Unit Cost } \
1 & 5,000 & \$ 0.05 \
2 & 2,000 & 1.50 \
3 & 100 & 8.50 \
4 & 500 & 45.00 \
5 & 650 & 3.50 \
6 & 10,000 & 100.00\
7 & 5,100 & 0.25 \
8 & 3,100 & 5.00 \
9 & 20 & .75 \
10 & 1,150 & 2.00
\end{array}$$
-Inventory items that belong in the A category include
A) Items 1, 6, and 7
B) Items 1 and 7
C) Items 3 and 9
D) Items 4 and 6

Quizplus · Accepted Answer

Items in the A category typically have the highest dollar value. Item 6 has the highest value (10,000 units at $100 each), and item 4 also has a high value (500 units at $45 each).

Bowring Ball Bearings Has 10 Different Items in Its Inventory