JJ Corporation resells one product to a small isolated community. It sellsan average of 60 sacks, but may sell as low as 20 sacks and as high as 75sacks each day. The supplier charges P500 per sack and an additional fixedcost of P1,300 for deliveries. It takes an average of ten days for orders toarrive. Investment in inventory are funded thru debt and equity at aweighted average cost of capital of 14%. How much would the minimumtotal annual inventory-related costs that JJ would incur if it applies thereorder point and EOQ models? Use 365 days.

Here it is given that number of days is 365 and average unit sold per day is 60. Hence Total…

Answered: lier charges P500 per sa ies. It takes…

Business

Accounting

lier charges P500 per sa ies. It takes an average entory are funded thru

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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Question

JJ Corporation resells one product to a small isolated community. It sells
an average of 60 sacks, but may sell as low as 20 sacks and as high as 75
sacks each day. The supplier charges P500 per sack and an additional fixed
cost of P1,300 for deliveries. It takes an average of ten days for orders to
arrive. Investment in inventory are funded thru debt and equity at a
weighted average cost of capital of 14%. How much would the minimum
total annual inventory-related costs that JJ would incur if it applies the
reorder point and EOQ models? Use 365 days.

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