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Advise department on how ABC system may be applied

(a) The maintenance department of a small manufacturing firm has responsibility for maintaining inventory of spare parts for the machinery it services. The parts inventory, unit cost, and annual usage are as follows; maintaining inventory of spare parts for the machinery it services. The parts inventory, unit cost, and annual usage are as follows;

Table 3: Inventory card

Item

Annual Demand

Unit Cost ($)

A211

1200

9

B390

100

90

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