A fresh food company in Oman is specialized in apples distribution in Oman. Annual sales forecast is 5760 boxes of apple. It costs OR 10 to make and receive an order and holding cost is OR 3.5 per box per year. The prices depend on quantities purchased such that the order quantities (in boxes) from 1 to 199 at a unit price RO 5; quantity 200 to 499 at a unit price 4.5 RO; and quantity 500 and more at a per unit price of 4 RO. If the discount option is considered, then what is the total annual cost of the best option including purchasing cost? O a. 29813 O b. 24031 None is correct O d. 21619 O e. 23548

A fresh food company in Oman is specialized in apples distribution in Oman. Annual sales forecast is 5760 boxes of apple. It costs OR 10 to make and receive an order and holding cost is OR 3.5 per box per year. The prices depend on quantities purchased such that the order quantities (in boxes) from 1 to 199 at a unit price RO 5; quantity 200 to 499 at a unit price 4.5 RO; and quantity 500 and more at a per unit price of 4 RO. If the discount option is considered, then what is the total annual cost of the best option including purchasing cost? O a. 29813 O b. 24031 None is correct O d. 21619 O e. 23548

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A firm currently produces and sells 2,500 units every 60 days. One unit costs $150 to produce and sells for $500. The firm currently offers all its customers a "net 30" credit period and all customers pay on Day 60. In order to boost sales, the firm is considering Project D, which will simply add a window and offering a 10% discount for customers who pay immediately. Research suggests sales will increase sales to 2,600 units and approximately one-quarter of all customers will pay on Day 0 and 75% will pay on Day 30. If the annualized cost of capital is 6%, what is the NPV of Project D? The firm will continue to run to perpetuity. (Assume production and sales occur on Day 0 and repeat every 30 days).
PAK Punjab recently started a new brand. The monthly demand has increased from 1000 kg to 2000 kg. This has caused their monthly consumption to increase from 1,666.67 kg to 3,333.33 kg. They placed their order of raw material to Gohar Traders who gave them 20% discount on market rate that is Rs.37 per kg. They Ordering Cost will be 166% of purchase price per kg. The company has to bear storage cost of 5% on average inventory. Interest cost will be 2 % per year while obsolescence cost is now increased to 8% from 5%. Calculate EOQ from the information given above and interpret the result. Calculate the number of orders to be placed per year. Calculate Total Ordering Cost & Total Carrying Cost
Alocal Omani retail store finds out the its competition is ordering 500 kgs each order of a coffee brand. Over years the local Omani store has realized that its competition has adopted an economic ordering quantity (EOQ) policy for ordering. Whereas, local Omani store has determined that it take OMR 25 to order and the annual holding cost is 25% of the price of the coffee brand. The price of the coffee brand is OMR 100 per kg. What is the annual demand for this coffee brand? Round -up to the nearest integer a. 90,000 B. None is correct c. 100,000 d. 125.000 E. 150, 000
KK Corporation resells one product to a small isolated community. It sells an average of 60 sacks, but may sell as low as 20 sacks and as high as 75 sacks each day. The supplier charges P500 per sack and an additional fixed cost of P1,300 for deliveries. It takes an average of ten days for orders to arrive. Investment in inventory are funded thru debt and equity at a weighted average cost of capital of 14%. How much would the minimum total annual inventory-related costs that KK would incur if it applies the reorder point and EOQ models? Use 365 days.
Western Jeans Co. has an annual plant capacity of 2,000,000 units, and current production is 1,920,000 units. Monthly fixed costs are $400,000, and variable costs are $9 per unit. The present selling price is $15 per unit. On July 6 of the current year, the company received an offer from Childs Company for 50,000 units of the product at $13 each. Childs Company will market the units in a foreign country under its own brand name. The additional business is not expected to affect the domestic selling price or quantity of sales of Western Jeans Co. Question Content Area a. Prepare a differential analysis dated July 6 on whether to reject (Alternative 1) or accept (Alternative 2) the Childs order. If an amount is zero, enter "0". If required, use a minus sign to indicate a loss. Differential AnalysisReject (Alt. 1) or Accept (Alt. 2) OrderJuly 6 Line Item Description Reject Order(Alternative 1) Accept Order(Alternative 2) Differential Effects(Alternative 2) Revenues $Revenues…
Use the information provided below to calculate the economic order quantity (expressed to the next whole number). INFORMATION Savoy Traders intends purchasing 19 200 watches at R80 each in the next year. The watches will be sold for R120 each at a steady rate during the year. The cost of placing a single order for the watches amounts to R24. The inventory holding cost amounts to 10% of the unit purchase price.
Economic order quantity (EOQ). Tinnendo, Inc. believes it will sell 4 million zen-zens, an electronic game, this coming year. Note that this figure is for annual sales. The inventory manager plans to order zen-zens 25 times over the next year. The carrying cost is $0.01 per zen-zen per year. The order cost is $510 per order. What are the annual carrying cost, the annual ordering cost, and the optimal order quantity for the zen-zens? Verify your answer by calculating the new total inventory cost. What is the annual carrying cost for the zen-zens? (Round to the nearest dollar.)
(Whether to explore or not the foreign market). A company annually manufactures 10,000 units of a product at a cost of $ 4 per unit and there is home market for consuming the entire volume of production at the sale price of $ 4.25 per unit. In the year 2019, there is a fall in the demand for home market which can consume 10,000 units only at a sale price of $ 3.72 per unit. The analysis of the cost per 10,000 units i : $ $ Material 15,000 Fixed overheads 8,000 Wages 11,000 Variable overheads 6,000 The foreign market is explored and it is found that this market can consume 20,000 units of the product if offered at a sale price of $ 3.55 per unit. It is also discovered that for additional 1000 units of the product (over initial 10,000 units) the fixed overheads will increase by 10%. Is it worthwhile to try to capture the foreign market ?
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