On-Hand Inventory of an Item Is Only 10 Units,and the Reorder

question 124

Multiple Choice

On-hand inventory of an item is only 10 units,and the reorder point R is 135.There are no backorders,and an open order of 110 units is scheduled to arrive next week.Which one of the following statements is TRUE?

• A) There is no need to order at the present time.
• B) A new order should be issued now.
• C) The current inventory position for this item is 125 units.
• D) The current inventory position for this item is 110 units.

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Definitions:

Operating Segments

Business units of a corporation that generate revenues and incur expenses, and for which separate financial information is available and evaluated regularly by the chief decision maker.

Reportable

Information or events significant enough to be disclosed in financial statements or to regulatory bodies.

Operating Segment

A component of a company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses related to transactions with other components of the same company.

Consolidated Assets

The total assets of a parent company and its subsidiaries, combined into one financial statement as if they were a single entity.