A firm's requirement of materials is 3,000 units (price Rs 20 per unit) for 6 days. The ordering cost per order is Rs 30 and the carrying cost is Re 0.50. If the schedule of discount given below is applicable to the firm, determine the most economical order quantity. Lot size Discount Rate 1- 499 none 500 - 699 1% 700 - 999 2% 1000 - 2,499 4% 2500 and above 7%

A firm's requirement of materials is 3,000 units (price Rs 20 per unit) for 6 days. The ordering cost per order is Rs 30 and the carrying cost is Re 0.50. If the schedule of discount given below is applicable to the firm, determine the most economical order quantity. Lot size Discount Rate 1- 499 none 500 - 699 1% 700 - 999 2% 1000 - 2,499 4% 2500 and above 7%

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

Kindly provide the correct options for the following three questions
A good costs a basic £180 a unit but if an order is made for more than 10 units this price is reduced by a discount of £2 for every one unit increase in the size of an order (up to a maximum of 60 units purchased), i.e. if the order size is 11, price is £178; if it is 12, price is £176 etc. Write an expression for the total cost of an order in terms of order size and simplify it. Assume order size is between 10 and 60 units.
The total purchase related cost is RO 50,000. The number of purchase orders placed is 80. The Activity cost driver rate is: a. RO 650 per order b. RO 525 per order c. RO 550 per order d. RO 625 per order
Answer the following short problems: Wergas, Inc. has determined the following for a given year: Economic order quantity 5,000 units Total cost to place purchase orders for the year P 10,000 Cost to place one purchase order P 50 Cost to carry one unit for 1 year P 4 What is Wergas’ estimated annual usage in units? Alilio Company is planning to build a new plant in Batangas City. The plant is expected to provide additional sales as follows: First Year P 2.0 million Second Year P 2.5 million Third Year P 3.0 million (maximum capacity) The financial manager of Alilio estimates that for every peso of sales, P0.25 must be invested in current assets. If all discounts are taken and bills are paid on time, accounts payable average P 0.04 per peso of sales. Other current liabilities, such as wages payable, typically average P0.05 per peso of sales. Required: Estimate the working capital investments required for the new plant in the 1st, 2nd& 3rd year of operations. How…
Massa Machine Tools expects total sales of $13,000. The price per unit is $4. The firm estimates an ordering cost of $6.64 per order, with an inventory cost of $.56 per unit. What is the optimum order size? (Round your answer to the nearest whole number.) Multiple Choice O O о 278 units 167 units 139 units 111 units
4. SPECIAL ORDER PRICING EXO Company sells "Power V" at a unit price of P 31,000, with the following unit production costs: Direct materials P 9,000 Direct labor Variable overhead Fixed overhead A special order for 1,000 units was received from Gorgonia, a well-known Power V distributor based in Tondo. Additional shipping costs for this sale are P 4,000 per unit. 7,000 5,000 3,000 REQUIRED: What is the minimum selling price per unit for the special order if: A) Twice is operating at FULL capacity? B) Twice has EXCESS capacity? Sales Less: Variable expenses 5. CONTINUE or SHUTDOWN (SHUTTING DOWN OPERATIONS) The combined income statement of BTS Stores (Butter and Dynamite branches) is given below: Total Butter Branch P 1,200,000 (840,000) P 360,000 (210,000) P 150,000 (180,000) (P 30,000) Contribution margin Less: Traceable fixed expenses Segment margin Less: Common fixed expenses Profit (loss) Dynamite Branch P 800,000 (360,000) P 440,000 (180,000) P 260,000 (120,000) P 140,000 P…
Q.1. An item sells for $25 a unit, but a 10% discount is offered for lots of 150 units or more. A company uses this item at the rate of 20 units per day. The setup cost for ordering a lot is $50, and the holding cost per unit per day is $.30. The lead time is 12 days. The same item can also be produced in house with its setup cost being $30 and production cost per unit being $20. Should the company purchase the item or produce it in-house?
DHL couriers delivers 3000 packages for 9 OMR. The variable cost is 3 OMR per package. Fixed costs are 6,000. Find total profit. a. RO 27,000 b. RO 15,000 c. RO 12,000 d. RO 9000
pare.2
Helpful Hardware sells windows (80% of sales) and doors (20% of sales). The selling price of each window is $580 and of each door is $1,180. The variable cost of each window is $385 and of each door is $880. Fixed costs are $1,737,720. The weighted-average contribution margin is: Multiple Choice O $495. $264. $174. $351. $216.
me EOQ analysis Tiger Corporation purchases 1,440,000 units per year of one component. The fixed cost per order is $55. The annual carrying cost of the item is 26.7% of its $10.41 cost. a. Determine the EOQ if (1) the conditions stated above hold, (2) the order cost is $1.00 rather than $55, and (3) the order cost is $55 but the carrying cost is $0.01. b. What do your answers illustrate about the EOQ model? Explain. ts a. (1) If there are no changes in the costs, the EOQ is units. (Round to the nearest integer. For infinity, input INF) Text ia Librai Calculat Resource Enter your answer in the answer box and then click Check Answer. Study Check Answer parts remaining Clear All nication Tools > This course (Untroduction to Finanre (EIN-101-D021 Distanre Spring 2021) is hased on Zutrer/Smart: Princinles of Managerial Finance Brief Re Type here to search hp Ins
2. The ABC Company consumes inventory of 67,500 units of components per year. The carrying cost per unit is RO 1.50. The fixed order cost is RO 25 per order. The production planning is 365-day year. a. What is the Economic Order Quantity (EOQ)? Interpret. 219 S b. Calculate and interpret the optimal number of orders to be placed. the ida c. If it takes five days to receive an order from suppliers, at what inventory level should ABC Company place another order.Interpret.

SEE MORE QUESTIONS

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

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

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