A Firm Has 56 Units of Product X on Hand

question 50

Multiple Choice

A firm has 56 units of product X on hand. Forecasts of demand are for 20 units per week. An MPS quantity of 100 units is planned to arrive in period 3. Customer orders are 24 for period 1, 18 for period 2, and 15 for period 3.
What quantity is available for commitment to new customers prior to the receipt of the MPS quantity in week 3?

• A)14
• B)32
• C)12
• D)20
• E)impossible to say without more information

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Definitions:

Quality of Income Ratio

A measure that indicates the amount of earnings that are realized as cash; assessing the ability of a firm to convert its net income into cash.

Interest Expense

The cost incurred by an entity for borrowed funds over a period, typically reported in financial statements.

Account Receivable

Money owed to a business by its clients for goods or services that have been delivered but not yet paid for.

Schedule Analysis

A method used to examine and interpret the timing and amounts of future cash flows, expenses, or revenues.