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Accounting for material

Forums › ACCA Forums › ACCA MA Management Accounting Forums › Accounting for material

  • This topic has 1 reply, 2 voices, and was last updated 4 years ago by John Moffat.
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    Posts
  • June 23, 2020 at 6:19 am #574499
    wroheet
    Participant
    • Topics: 8
    • Replies: 1
    • ☆

    A business uses 65,000 units of an item every year and works for 52 weeks per year. There is a delay of three weeks between placing an order for the item and receiving it.

    What should be set as a reorder level to ensure that inventory arrives just it is needed?

    June 23, 2020 at 8:02 am #574509
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54687
    • ☆☆☆☆☆

    Why are you attempting questions for which you do not have an answer? You should be using a Revision Kit from one of the ACCA approved publishers – they have answer and explanations.

    You need to calculate how many units they are using each week and then calculate how many they need to last the lead time of 3 weeks.

    This is all explained in my free lectures. The lectures are a complete free course for Paper MA and cover everything needed to be able to pass the exam well.

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