AICPA CPA-Business Exam - Topic 3 Question 13 Discussion

Actual exam question for AICPA's CPA-Business exam

Question #: 13
Topic #: 3

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 Alline at May 04, 2022, 08:45 AM

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Haley

8 months ago

Yup, 250 units makes perfect sense!

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Nobuko

9 months ago

Just to clarify, EOQ is the optimal order quantity, right?

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William

9 months ago

Wait, are we sure about that? Seems too straightforward.

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Lorean

9 months ago

Totally agree, it's definitely 250 units!

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Linn

9 months ago

The average inventory is EOQ plus safety stock, so 200 + 50 = 250 units.

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Stevie

9 months ago

Okay, I've got a strategy for this. Based on the options, it seems like using an expression to match node names or labels would be the most flexible approach. That way, I can target specific nodes without having to manually select them one by one. I'll make sure to test my expression thoroughly.

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Lynelle

9 months ago

This looks like a tricky one. I'll need to carefully read through the options and think about the logical conditions involved.

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