Erica would like to perform an ABC inventory analysis. She has gathered the following annualfigures for her jewelry design business: Metals (gold/silver), $25,000; Beads, S4,800; Clasps/closures,$3,500; Semi-precious stones, $8,500; Jeweler's tools/supplies, $1,800, Bags/boxes, $425; Ribbon,$250; Mise, $1001.Hint: You already have the total cost for each item, start by listing the inventary items in descending order, based on cost. See pages 225-226.Percentage %ABC ClassificationItemAnnual CostCumulative %a. Her efforts on negotiation contracts, obtaining competitive bids and establishing control procedures shouldbe spent on which items? Explain.b. How should she handle C items? Explain.

Answered: Image /qna-images/answer/39433562-33c0-49b5-a368-ca69b740fde3.jpg

Answered: 2. Her efforts on negotiation…

2. Her efforts on negotiation contracts, obtaining competitive bids and establishing control procedures should be spent on which items? Explain. b. How should she handle Citems? Explain.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter7: Inventories: Cost Measurement And Flow Assumptions

Section: Chapter Questions

Problem 11RE: Jessie Stores uses the periodic system of calculating inventory. The following information is...

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Question

Erica would like to perform an ABC inventory analysis. She has gathered the following annual
figures for her jewelry design business: Metals (gold/silver), $25,000; Beads, S4,800; Clasps/closures,
$3,500; Semi-precious stones, $8,500; Jeweler's tools/supplies, $1,800, Bags/boxes, $425; Ribbon,
$250; Mise, $100
1.
Hint: You already have the total cost for each item, start by listing the inventary items in descending order, based on cost. See pages 225-
226.
Percentage %
ABC Classification
Item
Annual Cost
Cumulative %
a. Her efforts on negotiation contracts, obtaining competitive bids and establishing control procedures should
be spent on which items? Explain.
b. How should she handle C items? Explain.

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