A Retailer Uses the Weeks' Supply Method of Inventory-Level Planning

question 11

Multiple Choice

A retailer uses the weeks' supply method of inventory-level planning.Average weekly sales during a four-month period are forecast to be $10,000; the retailer wants to stock six weeks of merchandise.What should the planned average inventory level be during this period?

• A) $ 10,000
• B) $ 48,000
• C) $ 60,000
• D) $240,000

---

Definitions:

Maturity Value

The total amount payable to an investor at the end of a fixed-term investment, including the principal and any accrued interest.

Adjusting Entry

An entry made in the accounting records at the end of an accounting period to allocate income and expenses to the period in which they actually occurred.

Interest

The charge for the privilege of borrowing money, typically expressed as an annual percentage rate.

Allowance Method

An accounting technique used to estimate and account for bad debts, allowing a company to anticipate and reduce accounts receivable to a more realistic value.