Item X is a standard item stocked in a company's inventory of spare parts. Each year, the firm uses about 2,000 units of Item X, which costs Php 1,000 per unit. Storage costs, which include insurance and cost of capital, amount to 18 percent of item unit cost. Placing an order for more of Item X costs Php 400. The company operates 360 days per year and Item X is received 9 days after placement of order. How much would be Item X's total annual storage cost? * Php 8,485 O Php 16,971 Php 2,000,000 None of the above
Item X is a standard item stocked in a company's inventory of spare parts. Each year, the firm uses about 2,000 units of Item X, which costs Php 1,000 per unit. Storage costs, which include insurance and cost of capital, amount to 18 percent of item unit cost. Placing an order for more of Item X costs Php 400. The company operates 360 days per year and Item X is received 9 days after placement of order. How much would be Item X's total annual storage cost? * Php 8,485 O Php 16,971 Php 2,000,000 None of the above
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Item X is a standard item stocked in a company's inventory of spare parts. Each year, the firm uses about
2,000 units of Item X, which costs Php 1,000 per unit. Storage costs, which include insurance and cost of
capital, amount to 18 percent of item unit cost. Placing an order for more of Item X costs Php 400. The
company operates 360 days per year and Item X is received 9 days after placement of order.
How much would be Item X's total annual storage cost? *
Php 8,485
Php 16,971
Php 2,000,000
O None of the above](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6f7d0593-9b98-4e72-8662-dd34e7bcd077%2F83bcc16a-3616-475d-bbed-392263b5173a%2Fql34k9o_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Item X is a standard item stocked in a company's inventory of spare parts. Each year, the firm uses about
2,000 units of Item X, which costs Php 1,000 per unit. Storage costs, which include insurance and cost of
capital, amount to 18 percent of item unit cost. Placing an order for more of Item X costs Php 400. The
company operates 360 days per year and Item X is received 9 days after placement of order.
How much would be Item X's total annual storage cost? *
Php 8,485
Php 16,971
Php 2,000,000
O None of the above
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