Item Annual Unit Item Annual Unit Number Usage Cost Number Usage Cost 1 36 $350 16 60 $610 2 510 30 17 120 20 3 50 23 18 270 15 4 300 45 19 45 50 5 18 1900 20 19 3200 6 500 21 910 3 7 710 22 12 4750 8 80 26 23 30 2710 9 344 28 24 24 1800 10 67 440 25 870 105 11 510 2 26 244 30 12 682 35 27 750 15 13 95 50 28 45 110 14 10 3 29 46 160 15 820 1 30 165 25
Item Annual Unit Item Annual Unit Number Usage Cost Number Usage Cost 1 36 $350 16 60 $610 2 510 30 17 120 20 3 50 23 18 270 15 4 300 45 19 45 50 5 18 1900 20 19 3200 6 500 21 910 3 7 710 22 12 4750 8 80 26 23 30 2710 9 344 28 24 24 1800 10 67 440 25 870 105 11 510 2 26 244 30 12 682 35 27 750 15 13 95 50 28 45 110 14 10 3 29 46 160 15 820 1 30 165 25
Chapter5: Operating Activities: Purchases And Cash Payments
Section: Chapter Questions
Problem 2.1C
Related questions
Question
The Aztec Company stocks a variety of parts and materi-
als it uses in its manufacturing processes. Recently, as de-
mand for its finished goods has increased, management
has had difficulty managing parts inventory; they fre-
quently run out of some crucial parts and seem to have an
endless supply of others. In an effort to control inventory
more effectively, they would like to classify their inven-
tory of parts according to the ABC approach. Following
is a list of selected parts and the annual usage and unit
value for each:Classify the inventory items according to the ABC ap-
proach using dollar value of annual demand.
Transcribed Image Text:Item
Annual
Unit
Item
Annual
Unit
Number
Usage
Cost
Number
Usage
Cost
1
36
$350
16
60
$610
2
510
30
17
120
20
3
50
23
18
270
15
4
300
45
19
45
50
5
18
1900
20
19
3200
6
500
21
910
3
7
710
22
12
4750
8
80
26
23
30
2710
9
344
28
24
24
1800
10
67
440
25
870
105
11
510
2
26
244
30
12
682
35
27
750
15
13
95
50
28
45
110
14
10
3
29
46
160
15
820
1
30
165
25
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