Scenario 9.6 a Company Operating Under a Continuous Review System Has an Has

question 20

Multiple Choice

Scenario 9.6
A company operating under a continuous review system has an average demand of 50 units per week for the item it produces.The standard deviation in weekly demand is 20 units.The lead-time for the item is six weeks,and it costs the company $30 to process each order.The holding cost for each unit is $10 per year.The company operates 52 weeks per year.A normal distribution table is appended to this exam.
-Use the information in Scenario 9.6.What is the economic order quantity (EOQ) for this item?

• A)less than or equal to 175 units
• B)greater than 175 units but less than or equal to 200 units
• C)greater than 200 units but less than or equal to 225 units
• D)greater than 225 units

Calculate ending inventory using the dollar-value LIFO method.

Identify the conditions under which each inventory costing method is preferable.

Understand the concept of LIFO reserve and its impact on financial reporting.

Understand and apply the different inventory valuation methods (FIFO, LIFO, weighted average, specific identification) and their impact on financial statements.

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Definitions:

Birthday Rule

An insurance policy determination rule that establishes priority of coverage for a child when covered by both parents' plans; typically, the parent whose birthday occurs first in the calendar year holds the primary plan.

Primary Payer

The insurance or funding source that is responsible for paying a claim first, before any other coverage is considered.

Fee Schedule

A list of the costs of common services and procedures performed by a physician.

Usual Fees

The standard charges or rates typically applied by professionals, such as doctors or lawyers, for their services.