The Bill of Material (BOM) for Products a and B

question 60

Multiple Choice

The bill of material (BOM) for Products A and B are shown below followed by a table of inventory data (called Exhibit 1) . The master production scheduling (MPS) for A calls for 150 units of A to be completed in Week 4 and another 225 units to be completed in Week 5. End item A has a two-week lead time. The MPS calls for 400 units of B to be completed in Week 6. End item B has a one-week lead time. Exhibit 1
$\begin{array}{|l|l|l|l|}\hline \text { DATA CATEGORY } & \text { C } & \text { D } & \text { E } \\\hline \text { Lot Sizing Rule } & \text { FOQ }=800 & \text { LFL } & \text { POQ =4 } \\\hline \text { Lead Time } & 1 \text { week } & 2 \text { weeks } & 1 \text { week } \\\hline \text { Scheduled Receipt } & 400 \text { (Week 1) } & 80 \text { (Week 1) } & \text { None } \\\hline \text { Beginning Inventory } & 80 & 60 & 100 \\\hline\end{array}$ ____________________________________________________________________
-Using the data given in Exhibit 1, determine the timing and amount of the planned order receipt for Item E.

• A) Week 1; 1,800 units
• B) Week 3; 1,900 units
• C) Week 2; 2,250 units
• D) Week 2; 3,850 units

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Definitions:

Freight Out

The cost of transporting goods from a seller's premises to the buyer's location, typically recorded as a selling expense by the seller.

Transportation to Consignees

The costs incurred to transport goods to consignees, who will sell the goods on behalf of the shipping party.

Cost Recovery Method

An accounting technique used to defer the recognition of income until the cash received from a transaction exceeds the costs associated with it.

Realized Gross Profit

The gross profit that is actually earned and recognized on sales transactions, after the cost of goods sold has been deducted.