10.7. A company manufactures and sells a seasonal product. Based on the salesforecast that follows, calculate a level production plan, quarterly endinginventories, and average quarterly inventories. Assume that the average quarterlyinventory is the average of the starting and ending inventory for the quarter. Ifinventory carrying costs are $3 per unit per quarter, what is the annual cost ofcarrying this anticipation inventory? Opening and ending inventories are zero.ANSWER. Annual inventory costs = $6000SalesProductionEnding InventoryAverage InventoryInventory CostQuarter 11000Quarter 22000Quarter 33000Quarter 42000Totals

Inventory management is an important part from financial point of view as inventory involves two…

Answered: 10.7. A company manufactures and sells…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

(Production schedule) The projected sales, in units,for Einstein Inc. By month for the first four months were January 8,000 February 12,000 March 16,000 April 19,200 Inventory of finished goods on December 31 was 6,400 units. The company desired to have an ending inventory each month equal to one-half of next month's estimated sales. Determine the company's production requirements for each month of the first quarter
For the current year ending October 31, Papadakis Company expects fixed costs of $530,200, a unit variable cost of $46, and a unit selling price of $68. a. Compute the anticipated break-even sales (units). units b. Compute the sales (units) required to realize a target profit of $121,000. units
keep costs down, CGC maintains a warehouse but no showroom or retail sales outlets. CGC has the following information for the second quarter of the year: 1. Expected monthly sales for April, May, June, and July are $180,000, $150,000, $270,000, and $50,000, respectively. 2. Cost of goods sold is 45 percent of expected sales. 3. CGC's desired ending inventory is 55 percent of the following month's cost of goods sold. 4. Monthly operating expenses are estimated to be: . Salaries: $33,000. ° Delivery expense: 8 percent of monthly sales. • Rent expense on the warehouse: $2,500. • Utilities: $500. • Insurance: $330. • Other expenses: $430. Required: 1. Compute the budgeted cost of purchases for each month in the second quarter. 2. Complete the budgeted income statement for each month in the second quarter. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the budgeted cost of purchases for each month in the second quarter. Total Cost of…
A production line is to run level production strategy. The sales forecast is shown below. Calculate the expected period-end inventory, if the opening inventory is 500 units. All periods are having same working days. Period 3 4 5 Forecast 700 700 1100 1600 1100 800 Planned production 1000 1000 1000 1000 1000 1000 Planned 500 Inventory
The order cost per order of an inventory is OMR. 60 with an annual carrying cost of OMR. 4 per unit. The annual demand is 12000 units. Calculate: Economic Ordering Quantity, Number of Orders per year and Ordering cost per year. a. 500 units, 20 Orders and 1200 OMR b. 480 units, 20 Orders and 1500 OMR c. 400 units, 20 Orders and 1800 OMR d. 600 units, 20 Orders and 1200 OMR
FreshPak Corporation manufactures two types of cardboard boxes used in shipping canned food, fruit, and vegetables. The canned food box (type C) and the perishable food box (type P) have the following material and labor requirements. Type of Box Direct material required per 100 boxes: Paperboard ($0.30 per pound) Corrugating medium ($0.15 per pound). Direct labor required per 100 boxes ($18.00 per hour). Indirect material Indirect labor Utilities Property taxes Insurance Depreciation. Total C $12,150 95,850 31,500 21,000 16,000. 33,500 $210,000 Total 40 pounds 30 pounds 0.25 hour The following production-overhead costs are anticipated for the next year. The predetermined overhead rate is based on a production volume of 400,000 units for each type of box. Production overhead is applied on the basis of direct-labor hours. The following selling and administrative expenses are anticipated for the next year. Salaries and fringe benefits of sales personnel. Advertising $115,500 23,500…
Use the information below for Product A and Product B to answer the question that follow.Next year’s sales forecast shows that 20,000 units of Product A and 22,000 units of Product B are going to be sold for prices of $10 and $12 per unit, respectively. The desired ending inventory of Product A is 20% higher than its beginning inventory of 2,000 units. The beginning inventory of Product B is 2,500 units. The desired ending inventory of Product B is 3,000 units.Total budgeted sales of both products for the year would be a.$264,000 b.$200,000 c.$42,000 d.$464,000
Narai Co. has a desired ending inventory of 30% of the next months forecasted sales. In turn, their cost of goods sold is 60%, and their forecasted sales for the months of March, April, May, June, and July are as follows: $750,000, $880,000, $700,000, $800,000, and $900,000 respectively. Purchases for the months of February and March were $500,000 and $360,000 and their purchases are paid as follows: 10% during the month of the purchase 80% in the next month and the final 10% in the next month. Required: Prepare budget schedules for the months of April, May, and June for required purchases and also for disbursements for purchases.
Diagnostic Supplies has expected sales of 98,000 units per year, carrying costs of $5 per unit, and an ordering cost of $8 per order. a. What is the economic ordering quantity? Economic ordering quantity b-1. What is the average inventory? Average inventory b-2. What is the total carrying cost? Total carrying cost units units
Turney Company produces and sells automobile batteries, the heavy-duty HD-240. The 2017 sales forecast is as follows. Quarter HD-240 1 5,100 2 7,320 3 8,280 4 10,430 The January 1, 2017, inventory of HD-240 is 2,040 units. Management desires an ending inventory each quarter equal to 40% of the next quarter’s sales. Sales in the first quarter of 2018 are expected to be 25% higher than sales in the same quarter in 2017.Prepare quarterly production budgets for each quarter and in total for 2017. TURNEY COMPANYProduction Budgetchoose the accounting period Product HD-240 Quarter 1 2 3 4 Year select an opening Production Budget item Enter a number of units Enter a number of units Enter a number of units Enter a number of units select between addition and deduction…
Faber Manufacturing, Inc., of St. Paul, Minnesota has an economic order quantity considering backordering of 763, a maximum backordering quantity in units of 480, annual holding cost/unit = $3.5; lead time = 1.4 month (the firm operates 12 months per year). If the firm's customers do not object to backordering and each unit backordered costs $ 4.5/year, then: What is the maximum inventory level?
Using the data below, estimate the direct labor costs per unit for 2021. Consider carefully the labor effort required, on average, to get one unit of sale. Selling price per unit is $70. Ending inventory each year is zero. Production capacity is #20,000 per year. Inflation is zero. It is a several week warranty. REVENUE Direct Materials Factory & Equipment Lease Utilities Selling and Administration Maintenance Legal Fees Direct Labour Patent Amortization Utilities Selling and Administration Maintenance Legal Fees Direct Labour Patent Amortization Profit Warranty replacements (#) O5.00 to 5.50 O 5.51 to 5.99 O 5.90 to 6.10 O 6.11 to 6.20 O 6.21 to 6.50 O No answer text provided. Year 2018 Year 2019 $896,000 $1,085,000 234,000 150,000 59,000 242,400 65,000 O 78,000 O 59,000 242,400 65,000 0 78,000 0 67,600 200 288,000 150,000 68,000 264,000 80,000 23,000 96,000 30,000 68,000 264,000 80,000 23,000 96,000 30,000 86,000 500 Year 2020 $1,204,000 324,000 150,000 74,000 277,600 123,000 11,000…

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS