The ABC system of managing inventory:
A) is the activity-based costing system.
B) is a simple system of managing inventory based on three codes.
C) is a method of applying different levels of inventory control based on the value of each category of inventory.
D) none of the above

Question

Quizplus · Accepted Answer

The ABC system of managing inventory is a method of applying different levels of inventory control based on the value of each category of inventory. The inventory is divided into three categories: A, B, and C. Category A consists of the most valuable items and requires the highest level of control, while category C consists of the least valuable items and requires the lowest level of control. This helps in efficient management of inventory and reduces the risk of stockouts or overstocking.

The ABC System of Managing Inventory