What is the economic order quantity for the following inventory policy. A firm sells 32,000 bags of premium sugar per year. The cost per order is P100 and the firm experiences a carrying cost of P0.85 per bag

What is the economic order quantity for the following inventory policy. A firm sells 32,000 bags of premium sugar per year. The cost per order is P100 and the firm experiences a carrying cost of P0.85 per bag

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 14P

See similar textbooks

Related questions

Q: C&A has on average $6000 in inventory and its daily sales are $200. What are C&A's weekly inventory…

A: C&A's weekly inventory turns = (No. of days x daily sales ) / Average inventory

Q: on hand or too little?

A: Given: To explain the firm which has more or less inventory on hands as,

Q: The ABC Semi Conductor Company purchase 40,000 units of mother board each year at a cost of $30.00…

A: EOQ = √ 2 X Annual Demand X Odering cost / Holding cost EOQ = √ 2 X 40,000 X 10 / 30 X 15% EOQ = √…

Q: Keto Grocery Store sells 400 gallons of milk each month. The average on-hand inventory is 50…

A: Inventory turnover ratio measures how efficiently the firm uses its inventory. It is calculated by…

Q: 1. You are inventory manager of Diego Supplies Inc. You computed the EOQ to be 500 units. Annual…

A: Since there are multiple questions, we will solve first for you. To get the remaining questions…

Q: Auto Zone purchases replacement brake fluid reservoirs directly from the manufacturer. Demand is…

A: A) EOQ=2Demand Cost × Ordering CostHolding Cost=21,000×$10×$2520%=2$250,00020% = 447 units…

Q: Carrefour estimates an annual demand of a grocery product at 5400 kgs. It costs RO 100 to make and…

A: Level at which company should place the order is known as reorder point.

Q: A Store has annual demand of 29,000 units. The annual carrying cost for a unit is $15.5, and the…

Q: 1. You are inventory manager of Diego Supplies Inc. You computed the EOQ to be 500 units. Annual…

A: Economic order quantity is the best possible order quantity which provides with least cost of…

Q: What is the inventory conversion period for O'Brian's if it has sales of $320,000, an average…

A: The inventory conversion period is based on the concept of days of inventory take into sales. It can…

Q: Nowlin Pipe & Steel has projected sales of 19,600 pipes this year, an ordering cost of $5 per order,…

A: The EOQ is the point at which the total costs of ordering and carrying inventory are at a minimum.…

Q: An entity uses the economic order quantity model and wishes to discover how many orders it need to…

A: Economic order quantity E.O.Q is the ideal or optimal quantity that helps in minimizing the total…

Q: A company wishes to improve efficiency and have 28 days in inventory. If COGS is forecasted as…

A: The average inventory amount can be found by using the inventory turnover ratio where the cost of…

Q: Midwest Charm, Inc. specializes in selling scented farm equipment. The company has established a…

A: EOQ=2×Annual demand×Ordering costCarrying cost=2×660×$2,52535%×$15,000=25 units

Q: Hammond Supplies expects sales of 207,640 units per year with carrying costs of $4.23 per unit and…

A: Demand = 235,880Carrying cost = 2.18Ordering cost = 3.1First, find the Economic Order Quantity…

Q: For a certain item, the cost-minimizing order quantity obtained with the basic EOQ model is 200…

A: Economic Order Quantity refers to the number of units the company should add to the inventory and…

Q: At the beginning of 2018, Midway Hardware has an inventory of $350,000. Because sales growth was…

A: The first step is to calculate the Cost of Goods Sold (COGS). The COGS is calculated as follows:COGS…

Q: Given the following, calculate the net price of the purchase by a customer who buys 1,000 cases of…

A: Cost of product = $75.00 per case Total cost = $75 x 1000 = $75,000 Trade discount = $5 x 1000 =…

Q: PRETTY Co. has a recent gross profit history of 40% of net sales. These data are taken from the…

A: Gross profit=Net sale×Rate=P 4,500,000×40%=P 1,800,000

Q: A new firm, ABC, purchased 20,000 units of product X at PI0 per unit on January 5. It sold 15,000…

A: The ending inventory is calculated as difference between units available for sale and units sold.

Q: National Co. uses about 200,000 yards of a particular fabric each year. The fabric costs P25 per…

A: The total annual cost is the cost of all the product cost including fixed and variable both. The…

Q: Outdoor Living Manufacturers uses 1,000 units of a product per year. Its fixed cost is $28 per…

A: Economic order quantity (EOQ): EOQ is the ideal quantity of units that a company would like to…

Q: If a firms inventory level of $10,000 represents 30 days sales, what is the annual cost od goods…

A: The computation of annual cost of goods sold: Hence, annual cost of goods sold is $121666.67

Q: Given: Peter Piper has projected sales of 72,000 pipes this year, ordering cost of P6 per order,…

A: Economic Order Quantity refers to optimal level of inventory being purchased by an entity while…

Q: National Co. has P5 million in inventory and P2 million in accounts receivable. Its average daily…

A: Inventory conversion period = Inventory/Average daily cost of goods sold Note :- In case cost of…

Q: Based on an EOQ analysis, the optimal order quantity is 4,000 units. Annual inventory carrying costs…

A: Answer to Question:- a) Annual Inventory Carrying cost: To calculate the annual inventory carrying…

Q: The dat

A: As given in question export of goods are supported with sufficient document as prescribed by law…

Q: The annual demand for an item is 20,000 units. The cost to process an order is $25 and the annual…

A: Here, Economic Order Quantity when purchase Price is not constant. When Purchase Price is not…

Q: Your company has sales of $97,200 this year and cost of goods sold of $71,200. You forecast sales…

A: The percent of sales method is a financial analysis technique that is used to estimate future…

Q: Himantayon Company provided the following information for the current year: Beginning inventory…

A: Gross purchase is the sum of the net purchase and purchase return. The net purchase can be…

Q: You are the manager of a successful retail operation. Inflation has been running at 3% per year on…

A: In accounting there are different methods that we can use for accounting of inventory. The main…

Q: Save-A-Lot Wally's Mart Inventories ($MM) Sales (net $MM) COGS ($MM) 5,743 40,694 59,217 397,206…

A: The ratio analysis helps to analyse the financial statements of the business.

Q: An inventory item has a demand of 10,000 units per month. The cost of each unit is $6, and the…

A: The question is related to Economic order Quantity. Economic Order Quantity is that level of…

Q: EOQ, and verify that it is the correct order quantity by finding the new carrying cost and new…

A: Annual Carrying Cost=Carrying cost×Annual SaleOrder Times/2=$0.04×4,000,00046/2=$1739.13 Annual…

Q: 4. Genesis Company is a wholesaler. It purchases 60,000 units of Product X per month for sale to…

A: Hi studentSince question has multiple subparts, we will answer only first three subparts.Economic…

Q: Botica Heaven has a total annual sale of PhP 40 M and is in operation with an inventory value of Php…

A: "Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: Tinatoots Store sells dumbbells for P79.99 a pair. The store consistently sells 5,700 pairs of these…

A: The ideal number of order which is being ordered by a company in order to minimize its total cost is…

Q: The order cost per order of an inventory is OMR. 60 with an annual carrying cost of OMR. 4 per unit.…

A: The quantity of order to be made is determined by calculating the EOQ, where the costs borne will be…

Q: A firm with sales of $500,000 has average inventory of $200,000. T he industry average for inventory…

A: Computation of inventory turnover:

Q: What happens if Cube Ltd.  Can save 2% in purchasing costs? The purchasing cost is 85% of COGS.…

A: Purchasing cost is the cost which has been incurred in purchasing the raw material. Given in the…

Q: Economic order quantity (EOQ). Tinnendo, Inc. believes it will sell 4 million zen-zens, an…

A: Current System Demand of Zensen= 4,000,000 No. of Orders= 25 Order Size= 4,000,000/25= 160,000…

Question

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

A retailer has annual sales of $500,000 and an average finished-goods inventory of$15,000. If the retailer sells each unit for an average of $25 and purchases the units for$15, what is its annual inventory turnover?
A company wishes to establish an EOQ for an item for which the annual demandis $800,000, the ordering cost is $32, and the cost of carrying inventory is 20%.Calculate the following:a. The EOQ in dollars.b. Number of orders per year.c. Cost of ordering, cost of carrying inventory, and total cost.d. How do the costs of carrying inventory compare with the costs of ordering?
Wayne's Wells has sales for the year of P48,900 and an average inventory 21 of P8,800. The cost of goods sold id equal to 60 percent of sales and the profit margin is five percent. How many days on the average does it take the firm to sell an inventory item?
Please help me answer c and d
Please solve all the questions
a. EFG reports annual sales of $ 30 million. Annual costs of goods sold is $ 15 million. Inventory is $ 5 million. Net income is $ 2 million. What is the months of supply of EFG ? Show all formulas used, calculations and results. Do on Blk Bd b. RST has monthly turns of 4, annual cost of goods sold $ 12 million, annual revenue of $ 36 million. What is its average inventory ? Show all formulas used, calculations and results. Do on Blk Bd For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). I U S Paragraph Arial 14px = v = v A ...
A company’s ordering cost is sh 25 and the holding cost is 10% of average inventory. Given that the total cost is shs. 750, find the demand
The rate of markup on cost on a product selling at $64.50 is 45%. What is the cost of the product to the retailer? What is the rate of markup on selling price?
Please help me with show all calculation thanku
What is the inventory conversion period for O'Brian's if it has sales of $320,000, an average inventory of $5,333 and a cash conversion cycle of 20 days? Assume the cost of sales is 55% of sales.
COGS?
Emil Traders, Inc. sells cellphone cases which it buys from a local manufacturer. Emil Traders sells 24,000 cases evenly throughout the year. The cost of carrying one unit in inventory for one year is P11.52 and the order cost per order is P38.40. If Emil. Traders would buy in economic order quantities, the total inventory carrying costs per year is a. P276,480. c. P 23,040. b. P 2,304. d. P138,240