AICPA Exam CPA-Business Topic 1 Question 67 Discussion

Actual exam question for AICPA's CPA Business Environment and Concepts exam

Question #: 67
Topic #: 1

[All CPA Business Environment and Concepts Questions]

Edwards Manufacturing Corporation uses the standard Economic Order Quantity (EOQ) model. If the EOQ for Product A is 200 units and Edwards maintains a 50-unit safety stock for the item, what is the average inventory of Product A?

A250 units.

B150 units.

C125 units.

D100 units.

Show Suggested Answer

Suggested Answer: B

Choice 'b' is correct. 150 units is the average inventory including a 50-unit safety stock.

Choices 'a', 'c', and 'd' are incorrect, per the above calculation.

by Paris at Mar 25, 2023, 05:49 PM

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