Calculate Maximum Level from information given below Consumption 200 units 400 units Re order Period...........

Costing - Phase (I & II) Basics of Cost Control and Analysis

Calculate Maximum Level from information given below:

Consumption: 200 units-400 units

Re-order Period: 15 days- 30 days

Re-order quantity= 6000 units

12,000 units

10,000 units

15,000 units

20,000 units

Maximum Level is fixed to avoid excessive stocking of material.it is maximum quantity that can be held in store at any time.

It is calculated as:

Re-order Level (+) Re-order Quantity (–) (Minimum Consumption x Minimum Re-order Period)

In given problem, maximum level=

12,000 + 6000 – (200 x 15) =15,000 units

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