ABC analysis classifies on-hand inventory into three categories based upon the
A) unit price
B) total dollar sales of an item
C) number of units on hand
D) rate of turnover

Question

Quizplus · Accepted Answer

ABC analysis categorizes items based on their total dollar sales, not based on their unit price, number of units on hand, or rate of turnover. By focusing on the total dollar sales, ABC analysis can help identify the high-value items that make up a significant portion of the inventory value and require more attention in terms of inventory management.

ABC Analysis Classifies On-Hand Inventory into Three Categories Based Upon