Cassie Company manufactures a line of deluxe office fixtures. The annual demand for its miniature oak file is estimated to be 5,000 units. The annual cost of carrying one unit in inventory is P10, and the cost to initiate a production run is P1,000. There are no miniature oak files on hand, and Cassie has scheduled four equal production runs of the miniature oak file for the coming year, the first of which is to be run immediately. Cassie has 250 business days per year. Assume that sales occur uniformly throughout the year and that production is instantaneous. If Cassie does not maintain a safety stock, the estimated total carrying costs for the office fixtures for the coming year based on their current schedule is: Refer to Cassie, the number of production runs per year of the miniature oak files that would minimize the sum of carrying costs and setup costs for the coming year is
Cassie Company manufactures a line of deluxe office fixtures. The annual demand for its miniature oak file is estimated to be 5,000 units. The annual cost of carrying one unit in inventory is P10, and the cost to initiate a production run is P1,000. There are no miniature oak files on hand, and Cassie has scheduled four equal production runs of the miniature oak file for the coming year, the first of which is to be run immediately. Cassie has 250 business days per year. Assume that sales occur uniformly throughout the year and that production is instantaneous. If Cassie does not maintain a safety stock, the estimated total carrying costs for the office fixtures for the coming year based on their current schedule is: Refer to Cassie, the number of production runs per year of the miniature oak files that would minimize the sum of carrying costs and setup costs for the coming year is
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
29.
Cassie Company manufactures a line of deluxe office fixtures. The annual demand for its miniature oak file is estimated to be 5,000 units. The annual cost of carrying one unit in inventory is P10, and the cost to initiate a production run is P1,000. There are no miniature oak files on hand, and Cassie has scheduled four equal production runs of the miniature oak file for the coming year, the first of which is to be run immediately. Cassie has 250 business days per year. Assume that sales occur uniformly throughout the year and that production is instantaneous. If Cassie does not maintain a safety stock, the estimated total carrying costs for the office fixtures for the coming year based on their current schedule is:
Refer to Cassie, the number of production runs per year of the miniature oak files that would minimize the sum of carrying costs and setup costs for the coming year is
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education