StylesThe ordering of material KL has caused concern in the past according to the chief accountant.There have been occasions when an excessive amount of stock has been carried beyond anypossible demand and when the problem was addressed and the stock level cut, orders have beenunfulfilled and sales lost because the company has run out of material KL. The chief accountanthas said he wants a policy that achieves the following aims.Adequate stock of material KL so as to minimize the risk of shortage and productiondislocation.This should be balanced with the avoidance of excessive stock levels of material KL andthe consequent tying up of scarce resources.You are given the following information:1) Budgeted average demand for material KL is 400 kilos per week and production is maintainedfor 50 weeks in the year.i) The ordering cost is S150 per orderIn) The standard material cost of KL is $6 per kilo and carrying costs are 33 % of that figureper annum, for each kiloIV) The maximuni usage in any one-week is 600 kilos and the minimum 400 kilos.o t曲hp StylesOnthe order takes anything from one to three weeks to be delivered after they haveaverage,been placed.Required:In order to meet the chief accountant's objectives, determine the followinga) The optimum order quantity that should be placedb) The reorder level for stock KLc) The minimum level of stock that should be heldd) The maximum level of stock that should be held.F 2422 WORDS品dP Type here to searchhp

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Required: In order to meet the chief accountant's objectives, determine the following a) The optimum order quantity that should be placed b) The reorder level for stock KL c) The minimum level of stock that should be held

Required: In order to meet the chief accountant's objectives, determine the following a) The optimum order quantity that should be placed b) The reorder level for stock KL c) The minimum level of stock that should be held

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter11: Auditing Inventory, Goods And Services, And Accounts Payable: The Acquisition And Payment Cycle

Section: Chapter Questions

Problem 23CYBK

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