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Vita Company sells glasses. Benz Company manufactures special glass lenses. Vita orders 16,640 lenses per year, 320 per week, at $40 per lens. Benz covers all shipping costs. Vita earns 22% on its cash investments. The purchase-order lead time is 3.0 weeks. Vita sells 315 lenses per week. The following data are available:           Relevant ordering costs per purchase order                     $47.25         Relevant insurance, materials handling, breakage,         and so on, per year                                                                   $5.50   What is the reorder point?   a. 1318 lenses   b. 1605.0 lenses   c. 660 lenses   d. 945.0 lenses

Vita Company sells glasses. Benz Company manufactures special glass lenses. Vita orders 16,640 lenses per year, 320 per week, at $40 per lens. Benz covers all shipping costs. Vita earns 22% on its cash investments. The purchase-order lead time is 3.0 weeks. Vita sells 315 lenses per week. The following data are available:           Relevant ordering costs per purchase order                     $47.25         Relevant insurance, materials handling, breakage,         and so on, per year                                                                   $5.50   What is the reorder point?   a. 1318 lenses   b. 1605.0 lenses   c. 660 lenses   d. 945.0 lenses

FINANCIAL ACCOUNTING
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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Vita Company sells glasses. Benz Company manufactures special glass lenses. Vita orders 16,640 lenses per year, 320 per week, at $40 per lens. Benz covers all shipping costs. Vita earns 22% on its cash investments. The purchase-order lead time is 3.0 weeks. Vita sells 315 lenses per week. The following data are available:

 

        Relevant ordering costs per purchase order                     $47.25

        Relevant insurance, materials handling, breakage,

        and so on, per year                                                                   $5.50

 

What is the reorder point?

  a.

1318 lenses
  b.

1605.0 lenses
  c.

660 lenses
  d.

945.0 lenses
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