The impact would be that the average size of the inventory will increase.
If the manager has decided to double the production batch size then the average size of the inventory will also increase.
<h3>What is an inventory? </h3>
- In general terms an inventory refers to all the goods, items, products, which are a part of the business organization.
- For different industries the inventories have different meanings.
- Manufacturing industry: the inventory is not only the finished or the final product but also the raw materials are included.
- Service industry: the inventory of the service industry includes the steps involved in the sales of the product.
- Raw materials, finished goods, work that is in process etc.. all of this is inventory.
- Inventory is an important asset for all businesses and it is important to understand the meaning of it.
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Answer:
$500 shrinkage
Explanation:
Calculation to determine the amount of shrinkage occurred during the month
Using this formula
Shrinkage=Ending inventory-Actual count
Let plug in the formula
Ending inventory=$10,000 + $35,000 - $30,000 Ending inventory= $15,000
Shrinkage=$15,000 - $14,500
Shrinkage= $500
Therefore the amount of shrinkage occurred during the month is $500
