{"id":225877,"date":"2025-06-04T17:44:16","date_gmt":"2025-06-04T17:44:16","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=225877"},"modified":"2025-06-04T17:44:19","modified_gmt":"2025-06-04T17:44:19","slug":"calculate-shortage-or-overage-percent-given-the-following-information","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2025\/06\/04\/calculate-shortage-or-overage-percent-given-the-following-information\/","title":{"rendered":"Calculate shortage or overage percent, given the following information"},"content":{"rendered":"\n<p>Calculate shortage or overage percent, given the following information: Opening inventory<br>960 Gross purchases<br>9,780 Gross sales<br>12,219 Transfers out<br>15,290 Markdown cancellations<br>670 Closing physical inventory $77,700<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" src=\"https:\/\/learnexams.com\/blog\/wp-content\/uploads\/2025\/06\/image-126.png\" alt=\"\" class=\"wp-image-225878\"\/><\/figure>\n\n\n\n<p><strong><mark style=\"background-color:rgba(0, 0, 0, 0);color:#f78da7\" class=\"has-inline-color\">The Correct Answer and Explanation is:<\/mark><\/strong><\/p>\n\n\n\n<p>To calculate the <strong>shortage or overage percent<\/strong>, we follow these steps:<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Step 1: Calculate Book Inventory (BI)<\/strong><\/h3>\n\n\n\n<p>Book Inventory =<br>Opening Inventory<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Gross Purchases<\/li>\n\n\n\n<li>Transfers In<br>\u2013 Transfers Out<br>\u2013 RTV (Return to Vendor)<br>\u2013 Gross Sales<\/li>\n\n\n\n<li>Customer Returns<br>\u2013 Markdowns<\/li>\n\n\n\n<li>Markdown Cancellations<br>\u2013 Employee Discounts<\/li>\n<\/ul>\n\n\n\n<p>Book&nbsp;Inventory=64,280+123,645+12,219\u22129,769\u2212960\u2212105,420+9,780\u221215,290+940\u2212670=$78,755\\begin{align*} \\text{Book Inventory} &amp;= 64,280 \\\\ &amp;+ 123,645 \\\\ &amp;+ 12,219 \\\\ &amp;- 9,769 \\\\ &amp;- 960 \\\\ &amp;- 105,420 \\\\ &amp;+ 9,780 \\\\ &amp;- 15,290 \\\\ &amp;+ 940 \\\\ &amp;- 670 \\\\ &amp;= \\textbf{\\$78,755} \\end{align*}<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Step 2: Compare to Physical Inventory<\/strong><\/h3>\n\n\n\n<p>Closing Physical Inventory = <strong>$77,700<\/strong> Shortage=78,755\u221277,700=$1,055\\text{Shortage} = 78,755 &#8211; 77,700 = \\textbf{\\$1,055}<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Step 3: Calculate Shortage Percent<\/strong><\/h3>\n\n\n\n<p>Shortage Percent = (ShortageBook&nbsp;Inventory)\u00d7100=(1,05578,755)\u00d7100\u22481.34%\\left( \\frac{\\text{Shortage}}{\\text{Book Inventory}} \\right) \\times 100 = \\left( \\frac{1,055}{78,755} \\right) \\times 100 \\approx \\boxed{1.34\\%}<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Final Answer: 1.34% shortage<\/strong><\/h3>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong> Explanation<\/strong><\/h3>\n\n\n\n<p>Inventory control is crucial in retail to track the difference between what is recorded (book inventory) and what physically exists (physical inventory). This difference is known as either <strong>shortage<\/strong> or <strong>overage<\/strong>. A shortage usually means inventory has been lost due to theft, damage, miscounting, or administrative errors. An overage suggests a counting or recording error where more inventory is found than expected.<\/p>\n\n\n\n<p>To compute the inventory discrepancy percentage, we first calculate the <strong>book inventory<\/strong>, which is an adjusted figure based on changes to inventory over the period. We start with the <strong>opening inventory<\/strong> and add or subtract relevant transactions such as purchases, transfers, returns, markdowns, and sales. This gives us what the inventory <em>should be<\/em> if everything was tracked perfectly.<\/p>\n\n\n\n<p>In the given data, the book inventory was calculated as <strong>$78,755<\/strong>, while the actual physical count at the end of the period showed only <strong>$77,700<\/strong> in inventory. The difference of <strong>$1,055<\/strong> is a shortage.<\/p>\n\n\n\n<p>To understand the scale of the shortage, we convert it to a percentage by dividing the shortage by the book inventory and multiplying by 100. This results in a <strong>1.34% shortage<\/strong>, which indicates a relatively small but notable discrepancy. Retailers use this percentage to monitor loss prevention effectiveness and tighten inventory control measures if the shortage exceeds acceptable limits.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" src=\"https:\/\/learnexams.com\/blog\/wp-content\/uploads\/2025\/06\/learnexams-banner4-370.jpeg\" alt=\"\" class=\"wp-image-225879\"\/><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>Calculate shortage or overage percent, given the following information: Opening inventory960 Gross purchases9,780 Gross sales12,219 Transfers out15,290 Markdown cancellations670 Closing physical inventory $77,700 The Correct Answer and Explanation is: To calculate the shortage or overage percent, we follow these steps: Step 1: Calculate Book Inventory (BI) Book Inventory =Opening Inventory Book&nbsp;Inventory=64,280+123,645+12,219\u22129,769\u2212960\u2212105,420+9,780\u221215,290+940\u2212670=$78,755\\begin{align*} \\text{Book Inventory} &amp;= 64,280 [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center 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