Calculation of the Reorder Point Requires Knowledge of

question 5

Multiple Choice

Calculation of the reorder point requires knowledge of

• A) the economic order quantity multiplied by the average usage rate.
• B) the time from the issuance of a purchase order until the order is received.
• C) the average time from the issuance of a purchase order until the economic order quantity occurs.
• D) the minimum inventory usage rate.

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Definitions:

Sales Journal

A specialized accounting journal used to record all sales transactions of a business.

Sales Revenue

The income generated from selling goods or services over a specific period before deducting any costs or expenses.

Accounts Receivable

Payments due to a company from its customers for the provision of goods or services, yet to be paid.

Sales Invoices

Documents issued by a seller to a buyer, detailing products or services sold, quantities, prices, and terms of sale.