Problem 4 ECONOMIC ORDER QUANTITY. Luster Corporation presents the following data: Usage is 400 units per month, cost per order is $20, and carrying cost per unit is $6. Given these data, answer the following questions: (a) What is the economic order quantity? (b] How many orders are required each month? (©) How often should each order be placed? (d) How much is the total cost of inventory?
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- Assume that Demand (D) = 10,000 units and Ordering Cost (S) = $10 (per order). Suppose that we order at the Economic Order Quantity (EOQ) and the total inventory cost TC $500. What is the EOQ?A company estimated the sales of 20,000 units during the month of June. The beginning inventory on hand is 2,100 units and the desired ending inventory for the month of June is 2,400 units. How many units should the company produce during the month of June? а. 19,700 units b. 20,300 units с. 24,500 units d. 15,500 unitsThe following information applies to Swifty Corporation: Beginning Inventory Ending Inventory Units produced Direct labor per unit Direct materials per unit Variable manufacturing overhead per unit Fixed manufacturing overhead per unit Variable operating expenses per unit Fixed operating expenses 0 Units O $55. O $87. O $45. O $58. 4160 units 41600 units $23 $16 $6 $13 $10 $80600 Using absorption costing, how much will the per unit product cost be?
- [The following information applies to the questions displayed below.]Ferris Company began January with 4,000 units of its principal product. The cost of each unit is $7. Merchandise transactions for the month of January are as follows: Purchases Date of Purchase Units Unit Cost* Total Cost Jan. 10 3,000 $ 8 $ 24,000 Jan. 18 4,000 9 36,000 Totals 7,000 60,000 * Includes purchase price and cost of freight. Sales Date of Sale Units Jan. 5 2,000 Jan. 12 1,000 Jan. 20 3,000 Total 6,000 5,000 units were on hand at the end of the month. 2. Calculate January's ending inventory and cost of goods sold for the month using LIFO, periodic system.Assume the following events for a month for Company X: Beginning Balance of Inventory is 400 Units and the cost is $ 200 per Unit. October 5 Company X purchases 400 Units at a cost of $220 per Unit. October 9 Company X sells 600 units for $500 per Unit. October 17 Company X purchases 200 Units at a cost of $230 per Unit. October 27 Company X sells 300 units for $500 per Unit. October 29 Company X purchases 200 units for $250 per Unit. Use this data to answer all questions. Using FIFO Periodic, what is the Gross Profit for October?Assume the following information for a merchandising company: Number of units sold Selling price per unit. Variable selling expense per unit Variable administrative expense per unit Fixed administrative expenses Beginning merchandise inventory Ending merchandise inventory Merchandise purchases What is the amount of total variable expenses? 20,700 $ 30 $ 3 $2 $ 50,000 $ 24,000 $ 19,000 $ 341,000
- 6. Required information Skip to question [The following information applies to the questions displayed below.]Ferris Company began January with 4,000 units of its principal product. The cost of each unit is $8. Merchandise transactions for the month of January are as follows: Purchases Date of Purchase Units Unit Cost* Total Cost Jan. 10 3,000 $ 9 $ 27,000 Jan. 18 4,000 10 40,000 Totals 7,000 67,000 * Includes purchase price and cost of freight. Sales Date of Sale Units Jan. 5 2,000 Jan. 12 1,000 Jan. 20 3,000 Total 6,000 5,000 units were on hand at the end of the month. 5. Calculate January's ending inventory and cost of goods sold for the month using Average cost, perpetual system. (Round average cost per unit to 4 decimal places. Enter sales with a negative sign.)Activities/Assessments: Activity 9 Solve the following EOQ model problems: 1. Each year, Y Company purchases 20,000 units of an item that costs P 640 per unit. The cost of placing an order is P 480, and the cost to hold the item in inventory for one year is P 150. a. Determine the EOQ. b. What is the average inventory level, assuming that the minimum inventory level is zero? c. Determine the total annual ordering cost and the total annual holding cost for the item if the EOQ is used. 2. A toy manufacturer uses approximately 32,000 silicon chips annually. The chips are used at a steady rate during the 240 days the plant operates. Annual holding cost is P27 per chip and ordering cost is P1,080. Lead time = 1 week. a. Find the EOQ. b. Find the reorder point. c. What would be your ordering policy for this item? d. Find the total annual cost of ordering and carrying silicon chips. 3. A large bakery buys sugar in 50-kg bags. The bakery uses an average of 1,344 bags a year. Preparing an order…Quick-Copy Duplicating Company uses 110,000 reams of standard-size paper a year at its various duplicating centers. Its current paper supplier charges $2.00 per ream. Annual inventory carrying costs are 15 percent of inventory value. The costs of placing and receiving an order of paper are $41.25. Assuming that inventory replenishment occurs virtually instantaneously, determine the following: a. The firm's EOQ b. The total annual inventory costs of this policy c. The optimal ordering frequency d. Compute and plot ordering costs, carrying costs, and total inventory costs for order quantities of 2,000, 4,000, 5,000, 5,500, 6,000, 7,000, and 9,000 reams. Connect the points on each function with a smooth curve, and determine the EOQ from the graph (and the table used in constructing the graph).
- 3. Required information Skip to question [The following information applies to the questions displayed below.]Ferris Company began January with 4,000 units of its principal product. The cost of each unit is $8. Merchandise transactions for the month of January are as follows: Purchases Date of Purchase Units Unit Cost* Total Cost Jan. 10 3,000 $ 9 $ 27,000 Jan. 18 4,000 10 40,000 Totals 7,000 67,000 * Includes purchase price and cost of freight. Sales Date of Sale Units Jan. 5 2,000 Jan. 12 1,000 Jan. 20 3,000 Total 6,000 5,000 units were on hand at the end of the month.5. Required information Skip to question [The following information applies to the questions displayed below.]Ferris Company began January with 4,000 units of its principal product. The cost of each unit is $8. Merchandise transactions for the month of January are as follows: Purchases Date of Purchase Units Unit Cost* Total Cost Jan. 10 3,000 $ 9 $ 27,000 Jan. 18 4,000 10 40,000 Totals 7,000 67,000 * Includes purchase price and cost of freight. Sales Date of Sale Units Jan. 5 2,000 Jan. 12 1,000 Jan. 20 3,000 Total 6,000 5,000 units were on hand at the end of the month.Arrow Distributing Corp. likes to track inventory by using weeks of supply as well as by inventory turnover. Arrow Distributing Corp. Net Revenue Cost of sales Inventory Total assets a) What is its weeks of supply? weeks (round your response to two decimal places). b) What is Arrow's inventory turnover? times per year (round your response to two decimal places). $16,830 $14,240 $920 $9,270 c) Suppose a manufacturer has an inventory turnover of 13.5 times per year. Arrow's supply chain performance relative to the manufacturer's, as measured by inventory turnover, is