AICPA Exam CPA-Business Topic 2 Question 98 Discussion

Actual exam question for AICPA's CPA-Business exam

Question #: 98
Topic #: 2

The following information regarding inventory policy was assembled by the JRJ Corporation. The company uses a 50-week year in all calculations.

The reorder point is:

A3,300 units.

B2,100 units.

C1,300 units.

D5,200 units.

Show Suggested Answer

Suggested Answer: B

Choice 'b' is correct. A 50-week year would mean that 200 units are sold per week (10,000 units per year over 50 weeks). Therefore, 800 units are sold during the lead-time (4 weeks 200 units per week). Required safety stock is 1,300 units, which means that no less than 1,300 units must be on hand at any time. The reorder point is then 2,100 units (1,300 safety stock plus the 800 units used during lead time).

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

by Dominga at Sep 19, 2024, 11:22 AM

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Emerson

10 months ago

I'm not sure, but I think the answer might be C) 1,300 units because of the company's 50-week year calculation.

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Lizette

10 months ago

I agree with Carin, the reorder point seems to be 2,100 units.

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Brynn

10 months ago

Hmm, let me see. 50-week year, 10-week lead time, 210 units per week. Yep, 2,100 units is the right answer. I wonder if the exam writer is trying to trick us with those other options. Better double-check my work just in case!

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Mel

9 months ago

It's always good to double-check, especially in tricky exam questions.

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Dorinda

9 months ago

Let's make sure to review our work carefully before finalizing our answer.

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Ma

9 months ago

I agree, the calculations match up with that option.

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Rebbecca

9 months ago

I think you're right, 2,100 units seems to be the correct answer.

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Dusti

9 months ago

The other options seem like distractions, but I'm confident in our answer.

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Inocencia

10 months ago

I think it's important to double-check our calculations just to be sure.

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Raymon

10 months ago

I agree, the reorder point is definitely 2,100 units.

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Charolette

10 months ago

Oh, come on! This is a piece of cake. The reorder point is 2,100 units. Anyone who can't figure that out shouldn't be taking this exam.

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Melvin

10 months ago

I think the correct answer is B) 2,100 units. The calculation seems straightforward, and I don't see any reason to select a different option.

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Carin

10 months ago

I think the answer is B) 2,100 units.

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Vallie

10 months ago

The reorder point is clearly 2,100 units. The lead time is 10 weeks, and the average weekly usage is 210 units. So, the reorder point is the lead time multiplied by the average weekly usage, which is 10 * 210 = 2,100 units.

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