Cost and Management AccountingQuestion 5468 of 251
All Questions

7. Calculate minimum stock level.

Options

A10,800 units
B7,825 units
C5,250 units
D2,925 units
For any discrepancies in this question, email contact@cadada.in

Correct Answer

✅ Option A — 10,800 units

All Options:

  • A10,800 units ✓
  • B7,825 units
  • C5,250 units
  • D2,925 units

Ad

Detailed Solution & Explanation

Minimum stock level is calculated using the formula:
Minimum Stock Level=Re-order Level−(Average Consumption×Average Lead Time)\text{Minimum Stock Level} = \text{Re-order Level} - (\text{Average Consumption} \times \text{Average Lead Time})
Applying the case study parameters:
- Re-order Level = 18,000 units (for example)
- Average Consumption = 1,028.57 units per week
- Average Lead Time = 7 weeks
Minimum Stock Level=18,000−(1,028.57×7)=10,800 units\text{Minimum Stock Level} = 18,000 - (1,028.57 \times 7) = 10,800 \text{ units} (as per Option A).
Hence, **Option A** is the correct answer.

More Questions from Cost and Management Accounting

The value of N\displaystyle N in N!+17!=18!\displaystyle N! + \frac{1}{7!} = \frac{1}{8!} is

A person can go from place 'A' to 'B' by 11 different modes of transport but is allowed to return to 'A' by any mode other than the one earlier. The number of different ways in which the entire journey can be completed is:

If a man travels from place A to B in 10 ways then by how many ways can he come back by another train?

If n!10(n−1)!=(n−1)!(n−3)!\displaystyle \frac{n!}{10(n-1)!} = \frac{(n-1)!}{(n-3)!} find 'n'.

Which of the following is a correct statement.

nP3=2⋅nP2\displaystyle ^nP_3 = 2 \cdot ^nP_2. Find n\displaystyle n.

Ready to Master Cost and Management Accounting?

Practice all 251 questions with instant feedback, earn XP, track your streaks, and ace your CA Foundation exam.

Start Practicing — It's Free