Required:(a) Economic order quantity(b) Optimum number of orders per year() Total cost of economic order quantity(d) Time gap between two consecutive orders.Ans: (a) 500 units (b) 10 times (c) Rs. 50,000 (d) 1.2 month or 3The annual need of a manufacturing company is 12,000 units and other information arbelow:Annual return on investment..15%Rent, tax and insurance per unit.Rs. 2.25 per yearCost of placing an order.Rs. 100Required:(a) Economic order quantity(b) Number of order(c) Length of inventory cycleHints: Purchase price per unit is assumed to be Rupee 1 if it is not

The profitability of the company can be arrived from the income statement prepared by the management…

Aris! are The annual need of a manufacturing company is 12,000 units and other information below: 15% Annual return on investment... Rs. 2.25 per year Rent, tax and insurance per unit.. Rs. 100 Cost of placing an order. Required: (a) Economic order quantity (b) Number of order (c) Length of inventory cycle

Aris! are The annual need of a manufacturing company is 12,000 units and other information below: 15% Annual return on investment... Rs. 2.25 per year Rent, tax and insurance per unit.. Rs. 100 Cost of placing an order. Required: (a) Economic order quantity (b) Number of order (c) Length of inventory cycle

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 company uses components at the rate of 15,000 units per year, whichare bought in at a cost of $3.90 each from the supplier. The companyorders 8,000 units each time it places an order and the averageinventory held is 500 units. It costs $30 each time to place an order,regardless of the quantity ordered.The total holding cost is 21% per annum of the average inventory held.Required:-Calculate the total holding cost and total ordering cost?
7. Which one of these is not an objective of cost accounting? a.Assisting shareholders in decision making b.Cost control and reduction c.Ascertainment of cost d.Determination of selling price 8. Calculate EOQ from the following details: Consumption per month is 2,000 units, ordering cost is RO 10 per order, purchase price is RO 100 per unit and annual carrying cost is 6%. a.283 units b.245 units c.219 units d.310 units
Determinant Company is a price−taker and uses a target−pricingapproach. Refer to the following information: Production volume 602,000 units per year Market price $34 per unit Desired operating income 17% of total assets Total assets $13,800,000 What is the target full product cost in total for the year? Assume all units produced are sold. Question content area bottom Part 1 A. $13,800,000 B. $18,122,000 C. $2,346,000 D.$ 102, 340
Abu Industries developed the following information for the product it sells: Sales price Variable cost of goods sold RM50 per unit RM28 per unit Fixed cost of goods sold Variable selling expense Variable administrative expense Fixed selling expense Fixed administrative expense RM650,000 10% of sales price RM2.00 per unit RM400,000 RM300,000 For the year ended 31 December 2020, Hasanah produced and sold 100,000 units of product. Required: (a) Illustrate a CVP income statement using the contribution margin format for Abu Industries for 2020. (b) Give the FIVE (5) basic components of CVP Analysis.
Problem: AAA Company produces and sells Product X: Annual Demand 24,000 units Annual cost to held one unit of inventory P11.52 Order Cost P38.40 Beg. Inventory P 0 a. What is the Economic Order Quantity? b. How much is the total Order Costs? c. How much is the total Carrying Costs?
2. EOQ / Production / Discounts A machine company uses 3000 brackets during the course of a year. The brackets are bought from an external supplier at a price of 50 kr. each and will be received the same day as the order is placed. The average ordering cost is 187.50 kr. per order. The company uses an interest rate of 18% to account for the cost of capital, the cost of storage and handling is estimated to 4% and insurance to 3% of the value. You can assume that there are 250 working days in one year. a. Determine the economic order quantity for the brackets. b. Given the optimal order size from a, calculate the following: i Cycle time. i. Average inventory level. i. Annual inventory cost. iv. Annual ordering cost. The company is able to produce the brackets themselves at a rate of 60 per day. The fixed cost of setting up for production run is 600 kr. You can also assume that the variable cost of production is equal to the price when buying from an external supplier. c. What is the…
Diagnostic Supplies has expected sales of 98,000 units per year, carrying costs of $5 per unit, and an ordering cost of $8 per order. a. What is the economic ordering quantity? Economic ordering quantity b-1. What is the average inventory? Average inventory b-2. What is the total carrying cost? Total carrying cost units units
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…
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Economic order quantity. J and L. Sloan Company estimates the demand for its CQ10 bearings at 50,000 units a year. the bearings cost $6 each. ordering cost is $90 per order and carrying cost is 24 percent of product cost. Required: a) compute the economic order quantity b) how many orders a year will the company place if it orders the economic order quantity?
entory Management - Spring21 Time left 1:06:07 on A company has 52 week per year operation. The weekly demand is for product it needs is 20 units and it costs OMR 2500 per unit to purchased. The cost of reordering is OMR 50 each order. The annual holding cost is OMR 660 per unit. Which economic order quantity policy, either round-up or round-down for inventory ordering to be used here to minimize total The corresponding order quantity will be ventory cost per year? of a. None is correct O b. 12 O C. 13 d. 14 O e. 15 FINISH ATTEMPT ...