Cost and Management AccountingQuestion 5469 of 251
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8. What will be danger level of stock ?

Options

A2,400 units
B7,875 units
C2,250 units
D2,240 units
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Correct Answer

✅ Option A — 2,400 units

All Options:

  • A2,400 units ✓
  • B7,875 units
  • C2,250 units
  • D2,240 units

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Detailed Solution & Explanation

Danger stock level is calculated as:
Danger Stock Level=Average Consumption×Lead Time for Emergency Purchases\text{Danger Stock Level} = \text{Average Consumption} \times \text{Lead Time for Emergency Purchases}
Applying the case study parameters, the danger stock level is 2,400 units.
Hence, **Option A** is the correct answer.

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