AICPA CPA-Business Exam - 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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Latia

3 months ago

Totally agree with 3,300 units!

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Zita

3 months ago

Wait, are we sure about these numbers?

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Janine

3 months ago

Definitely 5,200 units!

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Jospeh

4 months ago

I think it’s actually 2,100 units.

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Selma

4 months ago

The reorder point is 3,300 units.

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Reyes

4 months ago

I think I recall that the reorder point should be higher if the lead time is longer. I’m leaning towards option A, but I’m not completely confident.

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Dahlia

4 months ago

I’m a bit confused about the units needed for the reorder point. Was it based on average weekly sales or something else?

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Albert

4 months ago

This question feels similar to the practice problems we did on inventory management. I think the reorder point is based on lead time and demand.

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Vonda

5 months ago

I remember we calculated reorder points in class, but I’m not sure how to apply it here with the 50-week year.

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Frankie

5 months ago

This type of question can be tricky, but I've practiced similar problems. I'll start by identifying the relevant variables and then apply the reorder point formula step-by-step to arrive at the solution.

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Lynda

5 months ago

Hmm, I'm a bit unsure about this one. The information seems clear, but I want to make sure I'm not missing any key details that could impact the calculation. I'll need to double-check my work.

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Geoffrey

5 months ago

This looks like a straightforward inventory management question. I'll need to carefully review the information provided and apply the relevant formulas to determine the reorder point.

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Svetlana

5 months ago

Okay, I think I've got this. The key is to use the given information on lead time, usage, and safety stock to calculate the reorder point. I'm confident I can get the right answer.

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Emerson

1 year 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

1 year ago

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

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Brynn

1 year 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

1 year ago

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

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Dorinda

1 year ago

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

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Ma

1 year ago

I agree, the calculations match up with that option.

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Rebbecca

1 year ago

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

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Dusti

1 year ago

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

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Inocencia

1 year ago

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

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Raymon

1 year ago

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

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Charolette

1 year 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

1 year 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

1 year ago

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

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Vallie

1 year 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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