Table 14.4
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
-Inventory items that belong in the C category include ________. (See Table 14.4)
A) Items 4 and 6
B) Items 1, 6, and 7
C) Items 1, 3, and 9
D) Items 1 and 7

Question

Table 14.4
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 
-Inventory items that belong in the C category include ________. (See Table 14.4)
A) Items 4 and 6 
B) Items 1, 6, and 7 
C) Items 1, 3, and 9 
D) Items 1 and 7

Quizplus · Accepted Answer

According to the ABC system of inventory control, items that belong to the C category are those with low unit costs and low usage rates. Looking at the table, items 1, 3, and 9 have the lowest average unit costs among all the inventory items. Therefore, they belong to the C category. The other items have higher average unit costs and/or higher usage rates, which make them belong to the A or B category.

Table 14.4 Bowring Ball Bearings Has 10 Different Items in Its Inventory