In a Periodic Review System,the Order Up to Level

question 85

Multiple Choice

In a periodic review system,the order up to level

• A)equals the current inventory level plus the lot size ordered.
• B)equals the current inventory level minus the lot size ordered.
• C)equals the current inventory level plus the anticipated demand during lead time.
• D)equals the current inventory level plus the anticipated demand during lead time plus the lot size ordered.

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Definitions:

Raw Materials

The basic materials from which a product is made, prior to any processing or manufacturing.

Price Variance

The difference between the actual price paid for something and its standard or expected price.

Labor Efficiency Variance

The difference between the actual hours worked and the standard hours allowed for the work done, multiplied by the standard labor rate.

Direct Labor-Hours

The total hours worked by employees directly involved in the manufacturing of a product.