Bell Computers purchases integrated chips at $350 per chip. The holding cost is $36 per unit per year, the ordering cost is $119 per order, and sales are steady at 395 per month. The company's supplier, Rich Blue Chip Manufacturing, Inc., decides to offer price concessions in order to attract larger orders. The price structure is shown below.Quantity Purchased Price/Unit 1-99 units$350 100-199 units$325200 or more units$300 a) What is the optimal order quantity and the minimum annual cost for Bell Computers to order, purchase, and hold these integrated chips?The optimal order quantity after the change in pricing structure is ?units(enter your response as a whole number). The total annual cost for Bell computers to order, purchase, and hold the integrated chips is$ ?(round your response to the nearest whole number).

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Answered: Bell Computers purchases integrated…

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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Bell Computers purchases integrated chips at $350 per chip. The holding cost is $36 per unit per year, the ordering cost is $119 per order, and sales are steady at 395 per month. The company's supplier, Rich Blue Chip Manufacturing, Inc., decides to offer price concessions in order to attract larger orders. The price structure is shown below.

Quantity Purchased	Price/Unit
1-99 units	$350
100-199 units	$325
200 or more units	$300

a) What is the optimal order quantity and the minimum annual cost for Bell Computers to order, purchase, and hold these integrated chips?

The optimal order quantity after the change in pricing structure is ?
units

(enter your response as a whole number).

The total annual cost for Bell computers to order, purchase, and hold the integrated chips is

$ ?

(round your response to the nearest whole number).

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