You are considering the purchase of a closed circuit tv monitoring system for your store. the quarterly physical inventory has shown inventory shrinkage to be 2.5%. sales for the period were $875,495. the store is open 11 hours a day, 7 days a week. you estimate that you will have to pay an employee $7.50 per hour to monitor the system. compare the monthly cost of monitoring the closed circuit tv system to monthly shrinkage. assume 30 days per month.

The quarterly physical inventory shrinkage to be 2.5%.

Sales for the period =  $875,495

value of quarterly shrinkage in sales = 2.5 % of 875 495

value of quarterly shrinkage in sales = 21887.875

there are 3 months in one quarter

so value of monthly shrinkage in inventory = 21887.875 ÷ 3 = 7295.29

cost of monitoring the closed circuit TV system  = number of hours * employee pay per hour to monitor the system

cost of monitoring the closed circuit TV system = 30 * 11 * 7.5

cost of monitoring the closed circuit TV system = 2475

7295.29 > 2475

the monthly cost of monitoring the closed circuit TV system is less than  monthly shrinkage by 4820.29

this may not be at all, but i use the same website you're using for school, and if i'm stuck doing one of these i try to look for it on the section.