The Tiny Tots Toy Company manufactures only sleds. In 2016 Tiny Tots manufactured 10,000 sleds, but sold only 8,000 sleds. In 2016 Tiny Tots' change in inventory was
A) -2,000 sleds.
B) 1,000 sleds.
C) 2,000 sleds.
D) 3,000 sleds.

Question

Quizplus · Accepted Answer

Change in inventory = Beginning inventory - Ending inventory

In this case, the beginning inventory was 0 because Tiny Tots hadn't produced any sleds yet. The ending inventory was 2,000 sleds because they only sold 8,000 of the 10,000 sleds they produced.

So, Change in inventory = 0 - 2,000 = -2,000

Remember that a negative change in inventory means that the inventory decreased. So, Tiny Tots' change in inventory was -2,000 sleds. However, since the answer choices only have positive numbers, we can take the absolute value of -2,000 and choose "C) 2,000 sleds" as the best answer.

The Tiny Tots Toy Company Manufactures Only Sleds