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Accounting for materials-maximum level

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Accounting for materials-maximum level

  • This topic has 1 reply, 2 voices, and was last updated 10 years ago by John Moffat.
Viewing 2 posts - 1 through 2 (of 2 total)
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    Posts
  • March 26, 2015 at 4:34 pm #238989
    Molly Sum
    Participant
    • Topics: 39
    • Replies: 53
    • ☆☆

    data relating to one particular stores item are as follows:
    average daily issue 70 units
    maximum daily issues 90 units
    minimum daily issues 50 units
    lead time for the replenishment of stock 11 to 17 days
    reorder quantity 2000 units
    reorder level 1800 units
    what is the maximum stock level (in units) for this stores item?
    A.2950 B.3100 C.3250 D.3800

    my working:
    reorder level : 90 x 17 = 1530 units
    maximum level : 1530+2000-(11×50) = 2980 units
    please help why not get the correct answer is C.3250 ? thank you

    March 26, 2015 at 5:55 pm #239011
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54659
    • ☆☆☆☆☆

    Because the maximum level is the reorder level (1800) less the minimum issues over the lead time (11 x 50) plus the reorder quantity (2,000)

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