Which of the Following Values for "Z" Should We Use

question 75

Multiple Choice

Which of the following values for "z" should we use in as safety stock calculation if we want a Service Probability of 98%?

• A)1.64
• B)1.96
• C)2.05
• D)2.30
• E)None of the above

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Definitions:

Direct Labor Hours

The total hours worked by employees directly involved in manufacturing products or delivering services.

Direct Materials

Raw materials directly used in the manufacturing of a product, easily traceable to the finished good.

Total Cost

The complete cost of producing goods or services, including fixed and variable costs.

Predetermined Overhead Rate

The rate used to allocate overhead costs to products or cost objects, determined at the beginning of the accounting period.