$17.28 per order. The annual holding cost is 20% of the purchase price of $20 p following information is provided to you by the management accountant to use in yo The Normal usage 200 units per day Maximum usage 280 units per day Minimum usage 120 units per day Reorder period 20 to 30 days Required: Determine the FOO using the equation method

$17.28 per order. The annual holding cost is 20% of the purchase price of $20 p following information is provided to you by the management accountant to use in yo The Normal usage 200 units per day Maximum usage 280 units per day Minimum usage 120 units per day Reorder period 20 to 30 days Required: Determine the FOO using the equation method

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: A firm has beginning inventory of 150 units at a cost of $10 each. Production during the period was…

A: FIFO: FIFO stands for First-In, First-Out. As its name suggest, this method assumes that the oldest…

Q: If a company has four lots of products for sale, purchase 1 (earliest) for $17, purchase 2 (middle)…

A: LIFO is last in first out method of inventory costing and inventory valuation. It means that…

Q: uc

A: Q* = Demand * LT + Safety Stock Safety Stock = Q* - Demand * LT = 204 - (60 x 2) Safety Stock = 84…

Q: Given the following purchases: 1/15/2020 10 units @ $3 11/15/2020 10 units @ $6 8/15/2020 25 units @…

A: Inventory valuation:.There are three methods of inventory valuationFirst in first out methodLast in…

Q: Corp uses the LIFO method. Using the information provided, what is the unit cost of the 17 units…

A: The objective of the question is to determine the unit cost of the remaining units in inventory at…

Q: Milden Company is a merchandiser that plans to sell 37,000 units during the next quarter at a…

A: The income statement is prepared to estimate the net income or losses for the current period. The…

Q: please step by step solution.

A: Step 1:Step 2:Step 3: Step 4:

Q: You place an order for 310 units of inventory at a unit price of $160. The supplier offers terms of…

A: 1/15, net 90 means if the amount due is paid within 15 days, the customer will get 1% discount,…

Q: h) During January, 50 units costing $25 per unit were sold on account for selling price of $35 per…

A: The journal entries are prepared to keep the record of day to day transactions of the business.

Q: PLEASE DO PART B Harper Enterprises has an average annual demand of 45,000 units for its main…

A: Harper Enterprises has an average annual demand of 45,000 units for its main product line. The cost…

Q: Purchase price of product Schwinn Mountain Bike $ Down payment 256 $ 100 Amount financed Number of…

A: We will use following formulas to complete the table : ∘ Amount financed = Purchase price - Down…

Q: Munabhai

A: The objective of the question is to set up a transportation table and solve for the minimum-cost…

Q: Use the following information to complete this exercise: sales, 950 units for $20,400; beginning…

A: According to the last in first out method, the most recent purchases are first sold and the first…

Q: Requirement 1. Calculate the EOQ. Begin by selecting the formula used to calculate EOQ. (D=Demand…

A: The objective of the question is to calculate the Economic Order Quantity (EOQ) and the number of…

Q: b) Wansam Ltd extracted the following from its records: Monthly demands of Ba Carrying cost per unit…

A: Based on the analysis, Wansam Ltd. should order 2,828 units each time the inventory level reaches…

Q: Revise your worksheet to reflect these updated assumptions and then answer the questions that…

A: FIFO method is one of the methods of inventory valuation in which it is assumed that old purchases…

Q: Octopus Company provides you with the following information regarding its inventory: Maximum lead…

A: A reorder point (ROP) is the point at which your inventory must be replenished. In other words, it…

Q: a. Find the reorder point necessary to provide a 98 percent service probability.

A: Following formula can be used to calculate the re-order point:

Question

Electric spark Co., uses 60,000 of component Zima. The cost of placing an order is estimated at
$17.28 per order. The annual holding cost is 20% of the purchase price of $20 per unit. The
following information is provided to you by the management accountant to use in your analysis:
The Normal usage
200 units per day
Maximum usage
280 units per day
Minimum usage
120 units per day
Reorder period
20 to 30 days
Required:
1. Determine the EOQ using the equation method
2. Calculate the total cost of inventory per year, in case the company decided to use the EOQ.
3. Electric spark has been offered a 2 per cent discount on the cost if it places orders in quantities of
20,000. Discuss whether the company should accept the discount and place larger orders,

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Financial Reporting in Hyperinflationary Economies

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.

Similar questions

Lead time for one of your fastest-moving products is 24 days. Demand during this period averages 110 units per day. a) What would be an appropriate reorder point? units (enter your response as a whole number).
Riverbed's Classic Cars restores classic automobiles to showroom status. Budgeted data for the current year are as follows. 2 W S X Restorers' wages and fringe benefits Purchasing agent's salary and fringe benefits Administrative salaries and fringe benefits Other overhead costs Total budgeted costs (a) Your Answer Correct Answer # 3 E The company anticipated that the restorers would work a total of 12,720 hours this year. Expected parts and materials were $1,335,600. D In late January, the company experienced a fire in its facilities that destroyed most of the accounting records. The accountant remembers that the hourly labor rate was $70.00 and that the material loading charge was 83.00%. Your answer is correct. C 80 $ 4 R F V % 5 T G A Time Charges $292,560 6 63,600 25,440 $381,600 B Y H & 7 ← Material Loading Charges $71,550 U N 21,942 66,780 $160,272 * 00 8 J M ▶ 9 K O L P
The amount of markup on a store item is $11. Find the cost to the store if the markup is 20%.
Revise your worksheet to reflect these updated assumptions and then answer the questions that follow. Sales Sale Price 9,400 units 27 Date Number of Units Unit Cost Total Cost Beginning 1,500 10.30 $15,450 March 12 2,700 10.20 27,540 June 5 1,400 10.10 14,140 October 22 5,300 9.90 52,470 Totals 10,900 $109,600 Required: 1. Use your spreadsheet to recalculate the Cost of Goods Sold, Inventory balances, and Gross Profit under each method and enter your results below: (Round your answers to the nearest whole dollar amount.). FIFO LIFO Weighted Average Cost of Goods Sold Ending Inventory Gross Profit < Prev ♡ 14 of 14 Next
You are required show ALL supportingworkings where necessary and state any assumption(s) made. _C-V-P AnalysisGreek Manufacturing Company produces and sells a line of product that are sold usually all year round. Thecompany has a maximum production capacity of 100,000 units per year. Operating at normal capacity, thebusiness earned Operating Income of $600,000 in 2020. The following cost data has been prepared for theyear ended December 31, 2020.Selling price per unit……………………………………… $50.00Production Costs:Direct Materials …………………………………. $10.00Direct Labour ……………………………………. $8.00Variable Manufacturing Overhead ……………. $7.00Fixed Manufacturing Overhead…………....................... $450,000Fixed Selling & Administrative Expenses……………… $300,000Variable selling expense per unit ………………………. $10.00Required: a. Using the equation method calculate the normal capacity of the business b.Assuming sales equal to the normal capacity calculated in (a) above, prepare a contribution margin income…