COST ACCOUNTING
INVENTORY AND PRODUCTION MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Goods kept in store to cover seasonaldemand e.g. Christmas sale
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b Goods kept in store to cover unforeseenshortages or fluctuations in demand
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Detailed explanation-1: -The stock of foodgrains, namely rice and wheat, procured by the Government through the Food Corporation of India (FCI) is known as the Buffer Stock. The purchased food grains are stored in granaries.
Detailed explanation-2: -A minimum stock level is a threshold value that indicates the level below which actual material stock items should not normally be allowed to fall. In other words, a minimum stock level is a minimum quantity of a particular item of material that must be kept at all times.
Detailed explanation-3: -Buffer stock refers to a reserve of a commodity that is used to offset price fluctuations and unforeseen emergencies. It is generally maintained for essential commodities and necessities like food grains, pulses etc.
Detailed explanation-4: -The correct answer is A reserve of commodities used to offset deficit. Buffer stock: Buffer stock is a reserve of commodities used to offset deficits.