Which of the following statements is true of the 80-20 rule?
A. A company should carry out 80 percent of its production using 20 percent of the items in its inventory.
B. Eighty percent of a company's income comes from 20 percent of its products.
C. The cost of raw materials should be about 80 percent of the cost of the finished product, and the cost of manufacturing should be about 20 percent of the cost of the finished product.
D. Eighty percent of a company's supplies comes from one supplier, and the remaining 20 percent from other suppliers.
Answer: B
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