Appendix: EOQDiane Delbert operates a health food bakery that uses a special type of ground flour in one of its high-margin products. The bakery operates 365 days ayear. Delbert finds that she seems to order either too much or too little special flour and asks for your help. After some discussion, you find that she has noidea of when or how much to order. An examination of her records and answers to further questions reveal the following information:Annual usage of special flour (pounds)6,510Average number of days delay between initiating and receiving an order12Estimated cost per order$32.00Estimated annual cost of carrying a pound of special flour in inventory$0.50a. Calculate the economic order quantity for flour.Note: Round your answer to the nearest whole pound.913V poundsb. Assume that Delbert desires a safety stock cushion of seven days' usage. Calculate the appropriate order point.Note: Do not round until your final answer.Note: Round your final answer to the nearest whole pound.339x poundsCheck

EOQ - 2 x annual demand x order cost/ carrying cost Appropriate order point = Average daily usage x…

Answered: Appendix: EOQ Diane Delbert operates a…

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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2 Homestead Crafts, a distributor of handmade gifts, operates out of owner Emma Finn's house. At the end of the current period, Emma looks over her inventory and finds 1,500 units (products) in the basement, 22 of which were damaged by water and cannot be sold. 170 units in the van, ready to deliver per a customer order, terms FOB destination. • 180 units out on consignment to a friend who owns a retail store. How many total units should Emma include in the company's period-end inventory? ● ● Units in Ending Inventory: Units stored in basement Add: Units on consignment Units in transit Less: Damaged units Total units in period-end inventory 1,500 units 1,300 350 80: 3,070 units
Required information [The following information applies to the questions displayed below.] This year Elizabeth agreed to a three-year service contract with an engineering consulting firm to improve efficiency in her factory. The contract requires Elizabeth to pay the consulting firm $1,500 for each instance that Elizabeth requests its assistance. The contract also provides that Elizabeth only pays the consultants if their advice increases efficiency as measured 12 months from the date of service. This year Elizabeth requested advice on three occasions and she has not yet made any payments to the consultants. (Leave no answers blank. Enter zero if applicable.) b. How much should Elizabeth deduct this year under this service contract if she uses the cash method of accounting? Deductible amount
Situation MacKenzie Refrigeration is a manufacturer of residential refrigerators and freezers. MacKenzie manufactures refrigerators for various retailers and sells its products under the retailers own brand name. Each refrigerator it sells comes with a 2-year warranty. Recently, MacKenzie discovered a defective damper control assembly—an automatic valve that periodically opens to let cold air into the refrigerator compartment from the freezer compartment—that is used on its most popular refrigerators. Because of this defect, the valve has a tendency to remain in the open position and allow too much cold air into the refrigerator compartment. Therefore, any food in the refrigerator that contains liquid (e.g., milk, orange juice, meats, fruits) will freeze. MacKenzie’s Chief Operations Officer (COO) wishes to issue a product recall to repair the defective assembly which will cost the company approximately $1,000,000 to $1,200,000, or about 5% of its net income. However, the Chief…
Jarvie loves to bike. In fact, he has always turned down better-paying jobs to work in bicycle shops where he gets an employee discount. At Jarvie’s current shop, Bad Dog Cycles, each employee is allowed to purchase four bicycles a year at a discount. Bad Dog has an average gross profit percentage on bicycles of 25 percent. During the current year, Jarvie bought the following bikes: Description Retail Price Cost Employee Price Specialized road bike $ 3,900 $ 2,500 $ 2,730 Rocky Mountain mountain bike 4,500 3,900 3,600 Trek road bike 3,400 2,100 2,380 Yeti mountain bike 5,900 5,240 4,720 What amount is Jarvie required to include in taxable income from these purchases?
Amora is one of your best friends. She keeps complaining that she runs out of money each month before she gets paid. She's asked you to help her make a budget based on her income from her part-time job. She handed you a crumpled paper with the following record of her expenditures for last month. Before you help her make a budget, first help her balance her monthly transactions by filling in the last column on the table below. To obtain the balance, add income and subtract expenditures and withdrawals. Date Transaction Expenditure Income or Balance Paycheck-Direct Deposit |ATM cash + fee Movie and soft drink Transportation $268.43 -$21.50 2/1 2/1 $17.85 $20.00 $45.00 $53.47 2/1 2/3 2/5 Hairdresser 2/10 Old Navy clothes ATM cash Jewelry Transportation 2/12 -$60.00 2/15 $36.00 $15.00 2/19
After graduating from dental school two years ago, Dr. Betty Harris purchased the dental practice of a long-time dentist who was retiring. In January of this year, she had to replace the outdated autoclave equipment she inherited from the previous dentist. Now, as she is preparing her budget for next year, she is concerned about understanding how her cost for sterilizing her dental instruments has changed. She has gathered the following information from her records: Month Number of instruments used Total autoclave cost January 850 $7,780 February 750 7,125 March 920 8,279 April 950 8,735 May 1,150 9,645 June 900 8,208 July 1,050 9,490 August 975 8,699 (a) Identify the high and low points. Activity Level $ High point enter the activity level for high point $enter the high point in dollars Low point enter the…
Check my work Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For its services, the company has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $23.60 per hundred square feet. However, there is some question about whether the company is actually making any money on jobs for some customers-particularly those located on remote ranches that require considerable travel time. The owner's daughter, home for the summer from college, has suggested investigating this question using activity-based costing. After some discussion, she designed a simple system consisting of four activity cost pools. The activity cost pools and their activity measures appear below: Activity Cost Pool Cleaning carpets Travel to jobs Job support Other (organization-sustaining costs and idle capacity costs) Activity Measure Square feet cleaned (00s) Activity for the Year 14, 500 hundred square feet Miles driven 308,000 miles Number of…
CIA Review, Inc. provides review courses twice each year for students studying to take the CIA exam. The cost of textbooks is included in the registration fee. Text material requires constant updating and is useful for only one course. To minimize printing costs and ensure the availability of books on the first day of class, CIA Review has books printed and delivered to its offices two weeks in advance of the first class. To ensure that enough books are available, CIA Review normally orders 10 percent more than expected enrollment. Usually, there is an oversupply, and books are thrown away. However, demand occasionally exceeds expectations by more than 10 percent and there are too few books available for student use CIA Review has been forced to turn away students because of a lack of textbooks. CIA Review expects to enroll approximately 200 students per course. The tuition fee is $810 per student. The cost of teachers is $22,000 per course, textbooks cost $59 each, and other operating…
Homestead Crafts, a distributor of handmade gifts, operates out of owner Emma Finn's house. At the end of the current period, Emma looks over her inventory and finds that she has 1,300 units (products) in her basement, 20 of which were damaged by water and cannot be sold. • 350 units in her van, ready to deliver per a customer order, terms FOB destination. • 80 units out on consignment to a friend who owns a retail store. How many units should Emma include in her company's period-end inventory? Units in Ending Inventory: Units of Product on hand: 1,300 units Add: Less: 1,300 units Total units in period-end inventory ITEENILD
Annie's Homemade is deciding whether to retain or drop a 700-square feet satellite shop location. The company makes the ice cream sold at the satellite location at its larger main shop location. Twice a month the company transports ice cream from its main shop to the satellite location. The company gathered the following additional information to assist in making the decision: Annual sales at the satellite location i Ingredient costs as a percent of sales Monthly rent at satellite location (the lease is cancelable). Average monthly utility expense at satellite location. Part-time store managers' combined annual wages at satellite location Annual hourly wages paid to additional employees at satellite location Annual hours spent by salaried managers at the main shop location supporting the satellite location i Other annual expenses: Annual depreciation expense on satellite store's equipment (no salvage value) Annual pickup truck and cargo trailer depreciation, insurance, registration,…
Kim Epson operates a full-service car wash, which operatesfrom 8 a.m. to 8 p.m., 7 days a week. The car wash has two sta-tions: an automatic washing and drying station and a manualinterior cleaning station. The automatic washing and dryingstation can handle 30 cars per hour. The interior cleaningstation can handle 200 cars per day. Based on a recent year-end review of operations, Kim estimates that future demandfor the interior cleaning station for the 7 days of the week, expressed in average number of cars per day, would be asfollows:Day Mon. Tues. Wed. Thurs. Fri. Sat. Sun.Cars 160 180 150 140 280 300 250By installing additional equipment (at a cost of $50,000), Kimcan increase the capacity of the interior cleaning station to300 cars per day. Each car wash generates a pretax contribu-tion of $4.00. Should Kim install the additional equipment ifshe expects a pretax payback period of three years or less?
Sacco Industries manufactures a popular interactive stuffed animal for children that requires three computer chips inside each toy. The company pays $2 for each computer chip. To help to guard against stockouts of the computer chip, Sacco Industries has a policy that states that the ending inventory of computer chips should be at least 25% of the following month's production needs. The production schedule for the first four months of the year is as follows: E (Click the icon to view the production schedule.) Requirement Prepare a direct materials budget for the first quarter that shows both the number of computer chips needed and the dollar amount of the purchases in the budget. ..... Prepare the direct materials budget by first calculating the total quantity needed, then complete the budget. Sacco Industries Direct Materials Budget - X For the Months of January through March Data table January February March Quarter Units to be produced 5,600 4,800 4,200 14,600 Stuffed animals to be…

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