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8. Calculate the inventory carrying cost percentage for XYZ Company, given the following information: Finished goods inventory is $26 million, valued at full manufactured cost.
8. Calculate the inventory carrying cost percentage for XYZ Company, given the following information: Finished goods inventory is $26 million, valued at full manufactured cost. Based on the inventory plan, the weighted-average variable manufactured cost per case is 70 percent of the full manufactured cost. Chapter 5 Inventory Management 179 The transportation cost incurred by moving the inventory to field warehouse locations was $1.5 million. The variable handling cost of moving this inventory into warehouse locations was calculated to be $300,000 The company is currently experiencing capital rationing, and new investments are required to earn 15 percent after taxes. Personal property tax paid on inventory was approximately $200,000. Insurance to protect against loss of finished goods inventory was $50,000. Storage charges at public warehouses totaled $450,000. Variable plant storage was negligible. Obsolescence was $90,000 Shrinkage was $100,000. Damage related to finished goods inventory levels was $10,000, Transportation costs associated with the relocation of field inventory to avoid obsolescence was $50,000
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