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AICPA Exam CPA-Business Topic 3 Question 13 Discussion
Actual exam question for
AICPA's
CPA-Business exam
Question #: 13
Topic #: 3
[All CPA-Business Questions]
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?
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.
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