Data tableExpected annual demand for Galaxy jerseysOrdering cost per purchase orderCarrying cost per yearShow Transcribed TextJEach jersey costs ES $40 and sells for $80. The $10 carrying cost per jersey per year consistsof the required return on investment of $6.80 (17% x $40 purchase price) plus $3.20 in relevantinsurance, handling, and storage costs. The purchasing lead time is 5 days. ES is open 365days a year.RequirementsJ14,000$112$10 per jerseyĆ1. Calculate the EOQ.2. Calculate the number of orders that will be placed each year.3. Calculate the reorder point. Excel Sports (ES) operates a megastore featuring sports merchandise. It uses an EOQ decision model to make inventory decisions. It is now considering inventory decisions for its Los Angeles Galaxy soccer jerseys productline. This is a highly popular item. Data for 2020 are as follows:(Click the icon to view the data.)Read the requirements.Requirement 1. Calculate the EOQ.Begin by selecting the formula used to calculate EOQ. (D = Demand in units for one year, P = Ordering cost per purchase order, C = Carrying cost of one unit in stock, Q = Any order quantity.)

Calculation of EOQ , number of orders placed each year and re-order point are as follows

Data table Expected annual demand for Galaxy jerseys Ordering cost per purchase order Carrying cost per year 14,000 $112 $10 per jersey Each jersey costs ES $40 and sells for $80. The $10 carrying cost per jersey per year consists of the required return on investment of $6.80 (17% x $40 purchase price) plus $3.20 in relevant insurance, handling, and storage costs. The purchasing lead time is 5 days. ES is open 365

Data table Expected annual demand for Galaxy jerseys Ordering cost per purchase order Carrying cost per year 14,000 $112 $10 per jersey Each jersey costs ES $40 and sells for $80. The $10 carrying cost per jersey per year consists of the required return on investment of $6.80 (17% x $40 purchase price) plus $3.20 in relevant insurance, handling, and storage costs. The purchasing lead time is 5 days. ES is open 365

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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1-The annual demand for Samsung mobiles is 60,000. The cost to place an order is RO 200. The cost of purchase of mobile is RO 4.800 and the carrying cost is 20% of cost. Calculate the number of orders per year. 2-E-Max sold 40 laptops during November and their purchases are given below. Calculate the cost of goods sold by E-Max using average cost method. Purchases No of Laptops Cost/Unit November 10 13 80 November 18 25 100 November 27 30 120 a. 2940 RO b. 4600 RO c. 4200 RO d. 3780 RO
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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…
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Expected annual demand for Galaxy jerseys 14,000 Ordering cost per purchase order $112 Carrying cost per year $10 per jersey Each jersey costs PS $35 and sells for $70. The $10 carrying cost per jersey per year consists of the required return on investment of $5.95 (17% × $35 purchase price) plus $4.05 in relevant insurance, handling, and storage costs. The purchasing lead time is 5 days. PS is open 365 days a year. Requirement 1. Calculate the EOQ. Begin by selecting the formula used to calculate EOQ. (D=Demand in units for one year, P=Ordering cost per purchase order, C=Carrying cost of one unit in stock, Q=Any order quantity.) ModifyingAbove EOQ equals StartRoot StartFraction 2 DP Over Upper C EndFraction EndRoot With Subscript EOQ=2DPC Part 2 (Round your answer to the nearest whole number.) The EOQ is jerseys.