Estimating amount of labor involved in inventory stockrooms

Reference no: EM1315420

Estimating the amount of labor involved in inventory stockrooms:

In the past, Taylor Industries has used a fixed-time period inventory system that involved taking a complete inventory count of all items each month. However, increasing labor costs are forcing Taylor Industries to examine alternative ways to reduce the amount of labor involved in inventory stockrooms yet without increasing other costs, such as shortage costs. Here is a random sample of 20 of Taylor's items.

ITEM NUMBER	ANNUAL USAGE	ITEM NUMBER	ANNUAL USAGE
1	$1,500	11	$13,000
2	12,000	12	600
3	2,200	13	42,000
4	50,000	14	9,900
5	9,600	15	1,200
6	750	16	10,200
7	2,000	17	4,000
8	11,000	18	61,000
9	800	19	3,500
10	15,000	20	2,900

Question:

What would you recommend Taylor do to cut back its labor cost? (Illustrate using an ABC plan.)

Reference no: EM1315420

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