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CMA Intermediate · Financial Management and Business Data Analytics · Inventory Management

Mehta Auto Parts uses FSN analysis based on the time since last issue. Item codes and months since last issue: M1 = 1, M2 = 5, M3 = 14, M4 = 3. Its policy: Fast = issued within 3 months, Slow = more than 3 and up to 12 months, Non-moving = more than 12 months. Item stock values (₹): M1 40,000; M2 25,000; M3 15,000; M4 20,000. What is the total value of Fast-moving items and which item is Non-moving?

Fast-moving items total ₹60,000 and M3 is Non-moving. M1 (1 month) and M4 (3 months) are issued within 3 months, giving 40,000 + 20,000. M3 was last issued 14 months ago, which exceeds 12 months, so it is non-moving.

  1. A₹60,000; M3Correct
  2. B₹40,000; M3
  3. C₹60,000; M2
  4. D₹85,000; M3

Explanation

Fast items are issued within 3 months: M1 (1 month) and M4 (3 months), valued at 40,000 + 20,000 = ₹60,000. M2 (5 months) is Slow. M3 (14 months) exceeds 12 months, so it is Non-moving. The ₹40,000 option counts only M1.

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