Relevant Cost Relevant costIf annual demand is 24,000 units, orders areplaced every 0.5 months, and the cost to place.an order is $50, what is the annual orderingcost?

Explanation of Annual Demand:Annual demand refers to the total quantity of goods or materials…

Answered: Relevant cost If annual demand is…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter7: Budgeting

Section: Chapter Questions

Problem 7EB: Each unit requires direct labor of 4.1 hours. The labor rate is $13.75 per hour and next years...

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The ordering cost for a certain product is $8 per order and the holding cost is $1 per year. The annual demand is 2400 units. Consider the following ordering plans: plan 1: Order all 2400 at one time plan 2: Order 400 once each quarter plan 3: Order 100 once each month Determine: (a) Calculate the annual total costs associated with each plan (plan 1, 2 and 3), and compare the costs (total cost, holding costs and ordering cost). (b) Is there another plan, cheaper than any of these? Calculate the total cost of the cheaper or optimal plan; and for the optimal plan determine how many times in a year an order needs to be in place. (c) In the basic EOQ model, if the cost of placing an order doubles, and all other values remain constant, will the new EOQ increase or decrease then by what percentage.
Items purchased from a vendor cost $20 each, and the forecast for next year’s demand is 1,000 units. If it costs $5 every time an order is placed for more units and the storage cost is $4 per unit per year, a. What quantity should be ordered each time? b. What is the total ordering cost for a year? c. What is the total storage cost for a year?
What is the EOQ for a firm that sells 5,800 units when the cost of placing an order is $5.20 and the carrying costs are $4.00 per unit? Round your answer to the nearest whole number. units How long will the EOQ last? Use the rounded value from the previous question. Assume 365 days in a year. Round your answer to the nearest whole number. days How many orders are placed annually? Assume 365 days in a year. Use the rounded value from the previous question. Round your answer to the nearest whole number. orders per year As a result of lower interest rates, the financial manager determines the carrying costs are now $2.2 per unit. What is the new EOQ? Round your answer to the nearest whole number. units What is the annual number of orders? Assume 365 days in a year. Use the rounded values of the new EOQ and duration of the new EOQ in your calculations. Round your answer to the nearest whole number. orders per year
1. Annual Demand is 450 units. The cost to place an order is $80 and holding cost is 25% per year of the cost of the item. The supplier has just submitted the following cost schedule to you. Quantity Price EOQ Feasible? 1 to 50 $60 51-100 $54 Over 100 $51 a) Calculate the EOQ for each Price. Determine which are feasible. Fill in above. ( b) Is the EOQ for the lowest unit price feasible? If not, compare total cost at all break quantities larger than the feasible EOQ. c) What decision would you make?
1. The ACE company estimates its annual requirement requirement is 78,000 units at a price of 4 per unit. The carrying cost at 15% and its ordering cost at 90 per order. Compute the following:a) What is the most economical no. of units to order?b) No. of orders to be placed in a year.c) About how often will an order need to be placed?
3. Find out the ordering cost from the following information, Annual demand is 240 units, holding cost RO 4 per unit for a year and EOQ is 60 units.
The Xenopeltis Company estimates its requirement, which is 39,000 units semiannually at a price of P4 per unit. The carrying cost at 15% of the price and its ordering cost at P90 per order. On a 360-day basis, determine the following: About how often will an order need to be placed? *
A Company estimates that its carrying cost is 20% of the purchase price and its ordering cost at $40 per order. The estimated annual requirement is 10,000 units at a price of $200 per unit. What is the EOQ? * Your answer
The Xenopeltis Company estimates its requirement, which is 39,000 units semiannually at a price of P4 per unit. The carrying cost at 15% of the price and its ordering cost at P90 per order. On a 360-day basis, determine the following: What is the most economical no. of units to order? *
The annual demand for a certain product is 11,340 units. The company informs you that every time an order is placed for this product the cost per order incurred is £100. You are also told that the cost of holding one unit fora year is £0.7. What is the economic order quantity of the product?

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Relevant cost If annual demand is 24,000 units, orders are placed every 0.5 months, and the cost to place. an order is $50, what is the annual ordering cost?