Calculate Average Level from information given below Minimum Level 5 000 units Re order Quantity 6 0...........

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

Calculate Average Level from information given below:

Minimum Level= 5,000 units

Re-order Quantity= 6,000 units

4000 units

7000 units

8000 units

None of the above

Average Level indicates the quantity of material that the firm should normally keep in store.

It is calculated as:

Minimum level + ½ of Re-order Quantity.

In given problem, average level= 5,000 + ½ (6,000) = 8,000 units

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