Stickaroo CC, a hockey equipment business, estimates that it will sell 3 400 pairs of shin pads per year from a distributor in Spain. Each pair costs R 195.00 to purchase and R18.00 in freight charges. The company borrows funds at an interest rate of 9% per annum to finance inventories. Stickaroo CC's purchasing agent has calculated that it costs R 472.00 to place an order for each pair of shin pads and that the holding cost is R 6.00 for each pair. REQUIRED: 1. Calculate the number of pairs of shin pads that Stickaroo CC should request in each order. (Round off your answer to six decimal points) 2. Calculate the annual number of orders. (Round off your answer to six decimal points) Note: Where the answer to 1. and 2. are used in any calculations below use the answer rounded off to six decimal points. 3. Calculate the total annual ordering cost. (Round off your answer to two decimal points) 4. Calculate the total annual carrying cost. (Round off your answer to two decimal points) 5. Determine the order-size decision Stickaroo CC should make if the Spain distributor offers a 12.00% discount off the purchase cost excluding the delivery price for minimum orders of 1 428 pairs of shin pads. (For all the costs that make up the total costs round off to two decimal points, as well as the final answer) 6. Assuming sales are uniform throughout the year (365 days) and the lead time is 10 days; determine the reorder point at the EOQ level. (Round off your answer to the nearest whole unit) 7. What is the financial consequence if only 6 orders are placed for the year instead of ordering at the EOQ level? (For all the costs that make up the total costs round off to two decimal points, as well as the final answer) Note: you are only required to enter the missing figures (amounts or information) in the instances where they have not been provided. Where options are provided, you are required to choose the correct option from the drop-down list. Note that where a negative amount is required, type a minus symbol (-) in front of the amount. You do not need to type in the rand symbol (R) as this has been provided already.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Stickaroo CC, a hockey equipment business, estimates that it will sell 3 400 pairs of shin pads per year from a distributor in Spain. Each pair costs R 195.00 to purchase and R18.00 in freight
charges. The company borrows funds at an interest rate of 9% per annum to finance inventories. Stickaroo CC's purchasing agent has calculated that it costs R 472.00 to place an order for
each pair of shin pads and that the holding cost is R 6.00 for each pair.
REQUIRED:
1. Calculate the number of pairs of shin pads that Stickaroo CC should request in each order. (Round off your answer to six decimal points)
2. Calculate the annual number of orders. (Round off your answer to six decimal points)
Note: Where the answer to 1. and 2. are used in any calculations below use the answer rounded off to six decimal points.
3. Calculate the total annual ordering cost. (Round off your answer to two decimal points)
4. Calculate the total annual carrying cost. (Round off your answer to two decimal points)
5. Determine the order-size decision Stickaroo CC should make if the Spain distributor offers a 12.00% discount off the purchase cost excluding the delivery price for minimum orders of 1
428 pairs of shin pads. (For all the costs that make up the total costs round off to two decimal points, as well as the final answer)
6. Assuming sales are uniform throughout the year (365 days) and the lead time is 10 days; determine the reorder point at the EOQ level. (Round off your answer to the nearest whole
unit)
7. What is the financial consequence if only 6 orders are placed for the year instead of ordering at the EOQ level? (For all the costs that make up the total costs round off to two decimal
points, as well as the final answer)
Note: you are only required to enter the missing figures (amounts or information) in the instances where they have not been provided. Where options are provided, you are required to
choose the correct option from the drop-down list. Note that where a negative amount is required, type a minus symbol (-) in front of the amount. You do not need to type in the rand
symbol (R) as this has been provided already.
Transcribed Image Text:Stickaroo CC, a hockey equipment business, estimates that it will sell 3 400 pairs of shin pads per year from a distributor in Spain. Each pair costs R 195.00 to purchase and R18.00 in freight charges. The company borrows funds at an interest rate of 9% per annum to finance inventories. Stickaroo CC's purchasing agent has calculated that it costs R 472.00 to place an order for each pair of shin pads and that the holding cost is R 6.00 for each pair. REQUIRED: 1. Calculate the number of pairs of shin pads that Stickaroo CC should request in each order. (Round off your answer to six decimal points) 2. Calculate the annual number of orders. (Round off your answer to six decimal points) Note: Where the answer to 1. and 2. are used in any calculations below use the answer rounded off to six decimal points. 3. Calculate the total annual ordering cost. (Round off your answer to two decimal points) 4. Calculate the total annual carrying cost. (Round off your answer to two decimal points) 5. Determine the order-size decision Stickaroo CC should make if the Spain distributor offers a 12.00% discount off the purchase cost excluding the delivery price for minimum orders of 1 428 pairs of shin pads. (For all the costs that make up the total costs round off to two decimal points, as well as the final answer) 6. Assuming sales are uniform throughout the year (365 days) and the lead time is 10 days; determine the reorder point at the EOQ level. (Round off your answer to the nearest whole unit) 7. What is the financial consequence if only 6 orders are placed for the year instead of ordering at the EOQ level? (For all the costs that make up the total costs round off to two decimal points, as well as the final answer) Note: you are only required to enter the missing figures (amounts or information) in the instances where they have not been provided. Where options are provided, you are required to choose the correct option from the drop-down list. Note that where a negative amount is required, type a minus symbol (-) in front of the amount. You do not need to type in the rand symbol (R) as this has been provided already.
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