22. The company has P5,000,000 n in inventory and P2,000,000 in accounts receivable. Its average daily sales are P100,000. The company's payables deferral period (accounts payable divided by daily purchases) is 30 days. What is the length of the company's cash conversion cycle? A. 100 days B. 60 days C. 50 days D. 40 days

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
Pls answer number 22 to number 26 with solutions
22. The company has P5,000,000 n in inventory and P2,000,000 in accounts receivable. Its average
daily sales are P100,000. The company's payables deferral period (accounts payable divided by daily
purchases) is 30 days. What is the length of the company's cash conversion cycle?
A. 100 days
B. 60 days
C. 50 days
D. 40 days
23. A company annually consumes 10,000 units of Part X. The carrying cost of this part is P2 per
year and the ordering costs are P100. The company uses an order quantity of 500 units. If the
company operates 200 days per year, and the lead time for ordering Part X is 5 days, what is the
order point?
A. 250 units
B. 1,000 units
C. 500 units
D. 2,000 units
24 – 25. The Corporation operates its factory 300 days per year. Its annual consumption of Material
A is 1,200,000 gallons. It carries a 10,000-gallon safety stock of Material A and its lead time is 12
business days.
24. What is the order point for Material A?
A. 10,000 gallons
B. 38,000 gallons
C. 48,000 gallons
D. 58,000 gallons
25. If the EOQ for Material A is 30,000 gallons, and the carrying cost per gallon per year is PO.25,
what is the total annual carrying cost for Material A?
А. Р3,750
В. Р7,500
С. Р6,250
D. P10,000
ABAY
26. The Corporation consumes 1,200,000 gallons of Material Y per year. Its order quantity is
30,000 gallons. It maintains a safety stock of 10,000 gallons and its annual carrying costs are PO.25
per gallon per year. If the ordering cost is P20 per order, what are the total annual ordering costs?
А. Рб00
В. Р800
С. Р8,300
D. P1,200
Transcribed Image Text:22. The company has P5,000,000 n in inventory and P2,000,000 in accounts receivable. Its average daily sales are P100,000. The company's payables deferral period (accounts payable divided by daily purchases) is 30 days. What is the length of the company's cash conversion cycle? A. 100 days B. 60 days C. 50 days D. 40 days 23. A company annually consumes 10,000 units of Part X. The carrying cost of this part is P2 per year and the ordering costs are P100. The company uses an order quantity of 500 units. If the company operates 200 days per year, and the lead time for ordering Part X is 5 days, what is the order point? A. 250 units B. 1,000 units C. 500 units D. 2,000 units 24 – 25. The Corporation operates its factory 300 days per year. Its annual consumption of Material A is 1,200,000 gallons. It carries a 10,000-gallon safety stock of Material A and its lead time is 12 business days. 24. What is the order point for Material A? A. 10,000 gallons B. 38,000 gallons C. 48,000 gallons D. 58,000 gallons 25. If the EOQ for Material A is 30,000 gallons, and the carrying cost per gallon per year is PO.25, what is the total annual carrying cost for Material A? А. Р3,750 В. Р7,500 С. Р6,250 D. P10,000 ABAY 26. The Corporation consumes 1,200,000 gallons of Material Y per year. Its order quantity is 30,000 gallons. It maintains a safety stock of 10,000 gallons and its annual carrying costs are PO.25 per gallon per year. If the ordering cost is P20 per order, what are the total annual ordering costs? А. Рб00 В. Р800 С. Р8,300 D. P1,200
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Secondary Mortgage Market
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education