If Daily Demand Is Constant at 10 Units Per Day,and

question 163

Multiple Choice

If daily demand is constant at 10 units per day,and lead time averages 12 days with a standard deviation of 3 days,95 percent service requires how much safety stock?

• A)28 units
• B)30 units
• C)49 units
• D)59 units
• E)114 units

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Definitions:

Overhead Volume Variance

The difference between the budgeted overhead based on standard hours allowed and the actual overhead incurred, due to differences in activity levels.

Unfavorable Labor Efficiency Variance

A financial term indicating that the actual labor time to produce goods or services was higher than the budgeted or standard labor time, resulting in increased costs.

Variance Report

A document that compares planned financial outcomes to actual financial outcomes, highlighting differences (variances) for analysis.

Materials Costs

These are the costs associated with the raw materials used in the manufacture of products or the provision of services.