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FINANCIAL ACCOUNTING
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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Newstar Foods is a company manufacturing cereal. It has an annual demand for two flavors: Strawberry cereal and Blueberry cereal of 592,600 and 608,030 boxes respectively. Each box contains 18 ounces of cereal, and exactly half of the weight of the cereal comes from its fruit (strawberry or blueberry), and both fruits are imported from Japan. Newstar Foods has computed its ordering cost as US$60 per order. They pay their Japanese supplier 12.5 US cents per pound (there are 16 ounces in a pound) of strawberry and 10 cents per pound of blueberry, The annual holding cost of elther fruit is 20% of the value of the fruit. Answer the following questions based on the data above. Choose the closest number if needed. For the EOQ policy, the total annual stocking cost (the sum of the holding and ordering costs) for strawberry is $750 $1.000 $850 $613 O $900
Transcribed Image Text:Newstar Foods is a company manufacturing cereal. It has an annual demand for two flavors: Strawberry cereal and Blueberry cereal of 592,600 and 608,030 boxes respectively. Each box contains 18 ounces of cereal, and exactly half of the weight of the cereal comes from its fruit (strawberry or blueberry), and both fruits are imported from Japan. Newstar Foods has computed its ordering cost as US$60 per order. They pay their Japanese supplier 12.5 US cents per pound (there are 16 ounces in a pound) of strawberry and 10 cents per pound of blueberry, The annual holding cost of elther fruit is 20% of the value of the fruit. Answer the following questions based on the data above. Choose the closest number if needed. For the EOQ policy, the total annual stocking cost (the sum of the holding and ordering costs) for strawberry is $750 $1.000 $850 $613 O $900
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