Multiple Choice Questions on Zee is a product manufactured out of the raw material M Each unit of Zee requires 10 kg of M The re ........... for SEBI Grade A ( Officer) Exam Preparation

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Multiple Choice Questions

Zee is a product manufactured out of the raw material M Each unit of Zee requires 10 kg of M The re ...........

Costing - Phase (I & II) Methods of Costing
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    Zee is a product manufactured out of the raw material M. Each unit of Zee requires 10 kg of M. The re-order level of M is 15,000 kg. The weekly production of Zee varies from 300 to 500 units. Reorder period varies from 2 to 4 weeks. Re-order quantity of M is 12,000 kg.

    The Minimum Stock level and Maximum Stock level of M will be:

    3000 kg; 21000 kg

    Correct Answer

    5000 kg; 20000 kg

    Incorrect Answer

    4000 kg; 25000 kg

    Incorrect Answer

    5000 kg; 25000 kg

    Incorrect Answer

    None of the above

    Incorrect Answer
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    Explanation:

    Minimum level= Reorder level – (Average Consumption x Average reorder period)

    =15,000- (400 x 10 x 3 weeks) = 3000 kg

    Maximum Stock level= Re-order Level + Re-order quantity –(Minimum Consumption  x  Minimum Re-order period)

    =15,000   + 12000 – (300 x 10 x 2 weeks)= 21000 kg

    By: Vikas Goyal
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