Kren processing company uses 2,400 units of a product per year on a continuous basis. Theproduct carrying costs are at P60 per year and ordering costs are P252.05 per order.It takes 20 days to receive a shipment after an order is placed and the firm requires a safetystock of 8 days of usage in inventory.(a) Calculate the economic order quantity.(b) Calculate the total cost per year to order and carry this item.

At Economic Order Quantity the total cost is minimum. Formula: EOQ=2×Annual demand× cost per…

Answered: Kren processing company uses 2,400…

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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A company produces several product lines. One of those lines generates the following annual cost and production data: The company adds 40% to its production cost in selling to the retailer. The retailer in turn adds a 50% profit margin when selling to its customers. How much would it cost a retailer to buy 100 units of the product? (a) $4800 (b) $6720 (c) $7200 (d) $1008
Customers at furniture store demand an average of 6,000 bookcases per year. Each time an order is placed, an ordering cost of $300 is incurred. The annual holding cost for a single desk is 25% of the $200 cost of a bookcase. Assume that the lead time to receive an order is one week. a) Each time an order is placed, how many bookcases should be ordered? b) What is the cycle time, T? c) How many orders should be placed each year? d) Determine the total annual costs of meeting the customers' demands for bookcases.
PLEASE MAKE IT IN EXCEL AND SHOW THE FORMULAS Comercial El Alacrán, S.A., purchases 200,000 units per year of the only product it sells. The cost of each order is $35.00. The annual unit maintenance cost is 23% of its cost of $8.00. The supplier currently takes 5.5 days to deliver, and the company sorts and stores it in 3 days. The company makes significant efforts to shorten these lead times. If it manages to reduce, through an agreement with the supplier, its delivery time to 3.5 days and to do the sorting in 1.5 days, how many units does the decrease in the reorder point amount to?
ABC company uses 8,000 pens every year. For each pen, cach order cost is $30 and the annual holding cost is 10 per cent of unit cost. The unit cost depends on the quantity ordered as follows: Quantity 1-199 Unit Cost (S) 20 200-499 18 500-799 16 800+ 12 > Assume that demand has a constant rate and do not stockout; a) What is the optimal order size? b) Determine the yearly order quantity
A company has annual demand for its product of 800,000 units. Eachunit costs $10. Ordering costs are $400 per order and the annual holdingcost per unit is $0.85.A 0.65% discount is available on all orders of atleast 15,000 units and a 0.75% discount for orders of at least 35,000units.Required:-Calculate the optimum order level to reduce total inventory costs
Terminator, Inc., manufactures a motorcycle part in lots of 350 units. The raw materials cost for the part is $170, and the value added in manufacturing 1 unit from its components is $320, for a total cost per completed unit of $490. The lead time to make the part is 2 weeks, and the annual demand is 3,800 units. Assume 50 working weeks per year. a. How many units of the part are held, on average, as cycle inventory? nothing units. (Enter your response as an integer.) What is its value? $nothing. (Enter your response as an integer.) b. How many units of the part are held, on average, as pipeline inventory? nothing units. (Enter your response as an integer.) What is its value? $nothing. (Enter your response as an integer.)

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