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Ch 12_Inventory Management_ABC_Classification Tool Outlet (5 pts) Tool Outlet sales consumer tools it purchases from manufacturers. In order to maintain accurate perpetual inventory balances, Tool
Ch 12_Inventory Management_ABC_Classification Tool Outlet (5 pts) Tool Outlet sales consumer tools it purchases from manufacturers. In order to maintain accurate perpetual inventory balances, Tool Outlet performs cycle counting. An ABC Classification is used to determine the frequency of counting part numbers and tolerance limits for comparing physical counts to perpetual inventory balances. Tool Outlet has the following policy/guideline for determining categorization of its part numbers: A items: 10-20% of part numbers Citems: 50-60% of part numbers B items: balance of part numbers. Typically, ABC items often fall into the following categories: A items: 60-70% of annual dollar usage C items: 10-15% of annual dollar usage B items: Balance (often 15% - 30% of annual dollar usage) Tool outlet provides you with the following information for its Dewalt 20v line of cordless tools: Part Number Unit Cost Annual Usage A10 $10 200 All 10 30 B10 25 600 B11 16 500 C10 36 150 C11 30 40 A12 16 25 A13 40 120 B12 20 80 B13 15 110 C12 80 200 C13 12 90 A14 20 300 A15 10 550 B14 30 800 B15 20 60 a). Develop an ABC Classification for these items
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