Bowring Ball Bearings Has 10 Different Items in Its Inventory

question 180

Multiple Choice

Bowring Ball Bearings has 10 different items in its inventory. The average number of units held in inventory and the average unit cost are listed for each item. The firm uses an ABC system of inventory control.
$$\begin{array} { l r r } & \text { Average Number of Units } & \text { Average Unit Cost } \\1 & 5,000 & \$ 0.05 \\2 & 2,000 & 1.50 \\3 & 100 & 8.50 \\4 & 500 & 45.00 \\5 & 650 & 3.50 \\6 & 10,000 & 100.00\\7 & 5,100 & 0.25 \\8 & 3,100 & 5.00 \\9 & 20 & .75 \\10 & 1,150 & 2.00\end{array}$$
-Inventory items that belong in the A category include

• A) Items 1, 6, and 7
• B) Items 1 and 7
• C) Items 3 and 9
• D) Items 4 and 6

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Definitions:

Expenses

Costs that a business incurs through its operations to generate revenue, including costs of goods sold, rent, utilities, and salaries.

Profit & Loss Statement

A financial report that summarizes the revenues, costs, and expenses incurred during a specific period, typically used to assess a company's financial performance.

Income

The financial gain received by an individual or a business, often obtained from a job, business operations, or investments.

Expenses

Costs incurred by a business in the process of earning revenue, such as salaries, rent, and utilities.