Question

If your January closing book BOM inventory is $550,100 and the physical inventory counted is $580,650, what is the shortage or overage percentage if annual net sales are $1,272,900?

Answer 1

Answer:

2.4%

Explanation:

Calculation for what is the shortage or overage percentage

First step is to find the amount of inventory

Using this formula

Inventory=Physical inventory -BOM inventory

Let plug in the formula

Inventory=$580,650-$550,100

Inventory=$30,550

Based on the above calculation the inventory has a positive amount of $30,550 which indicates average percentage

Now let calculate the overage percentage if annual net sales are $1,272,900

Using this formula

Overage percentage= Overage Amount/Annual net sales×100

Let plug in the formula

Overage percentage=$30,550/$1,272,900×100

Overage percentage=2.4%

Therefore the overage percentage will be 2.4%