Consider the Following Conditions for an Item Used in the Hess

question 172

Multiple Choice

Consider the following conditions for an item used in the Hess Company's manufacturing process: Which of the following statements best describes Hess's situation regarding inventory replenishment?

• A)No action is required,since a scheduled receipt is due to be delivered to Hess.
• B)To cover its backorders,Hess should order two lots of 50 units.
• C)Because it is incurring backorders,Hess should increase its reorder point.
• D)Hess should place an order for 50 units,since the inventory position is less than the reorder point.

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Definitions:

Income Statement

A financial statement that shows a company’s revenues and expenses over a specific period, providing insight into its profitability.

Cash Flow

The total amount of money being transferred into and out of a business, especially affecting liquidity.

Reported Profits

These are the earnings a company officially announces to the public and regulatory bodies, reflecting its performance over a specific period.

Common Stock

Common stock represents shares of ownership in a corporation, giving holders voting rights and a share in the company's profits via dividends.