If the minimum stock level and average stock level of raw material 'A' are 4,000 and 9,000 units respectively, what is its reorder quantity —
CS Executive · Cost and Management Accounting · PYQS · December 2014
If the minimum stock level and average stock level of raw material 'A' are 4,000 and 9,000 units respectively, what is its reorder quantity —
Answer & Explanation:
Correct Answer: Option (C)
Correct answer: (C) 10,000 units. Average stock = minimum stock + half the order quantity; order quantity = 2×(9,000−4,000) = 10,000.
Topics: Material Costing
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