Karl's Keychain Company produces keychains that sell in its stores for $1 each. On January 1, 2015, the company had inventory of 10,000 keychains. During 2015, the company produced 900,000 keychains. At the end of the business year on December 31, 2015, the company's inventory of keychains was 8,000. What was the value of Karl's inventory investment in 2015?
A) $8,000
B) -$2,000
C) $18,000
D) $898,000

Question

Quizplus · Accepted Answer

The inventory investment is calculated as the change in inventory value. The inventory decreased from 10,000 to 8,000 keychains, a reduction of 2,000 keychains. Since each keychain is valued at $1, the inventory investment is -$2,000.

Karl's Keychain Company Produces Keychains That Sell in Its Stores