Beginning Inventory is an important metric to know in this chart because it helps to determine the value of the product on hand at the start of the period. This initial value forms the basis from which various other calculations can be derived, such as the Total Available inventory, which is crucial for accurate inventory management, financial planning, and cost analysis.
Given the information from the chart:
1. Beginning Inventory: This is the starting value of the inventory, which is [tex]$11,500.
2. Additions Over Time: Any purchases made during the period, including daily alternative purchases ($[/tex]1,000), produce purchases ([tex]$550), protein purchases ($[/tex]1,000), and dry goods purchases ([tex]$1,000), contribute to increasing this inventory value.
3. Total Available: By summing the beginning inventory with all the purchases, we get the total available inventory during the period:
\[
\$[/tex]11,500 + \[tex]$1,000 + \$[/tex]550 + \[tex]$1,000 + \$[/tex]1,000 = \[tex]$15,050
\]
4. Ending Inventory: This is the inventory left over at the end of the period, which is $[/tex]10,900. This value is subtracted from the total available to determine how much has been used or sold.
5. Revenue (Sales): This is the revenue generated from sales, which is [tex]$12,500.
6. Food Cost (COGS): This is the cost of goods sold, which is $[/tex]4,100. This cost helps to determine the food cost percentage, which is crucial for assessing the financial health of operations.
The chart shows that the Food Cost Percentage is:
[tex]\[
\left( \frac{\$4,100}{\$12,500} \right) \times 100 = 32.8\%
\][/tex]
Conclusion: The Beginning Inventory is key to understanding how much value the product on-hand has. It allows you to track how much has been added during the period and evaluate the cost effectiveness and sales performance. Therefore, the correct answer is:
c. To know how much value the product on-hand has
