Zerbel Company, a wholesaler of large, custom-built air conditioning units for commercial buildings, has noticed considerable fluctuation in its shipping expense from month to month: Month January Units Total Shipping Shipped Expense February 7 March April May June 4752368 $2,200 $3,100 $2,600 $1,500 $2,200 $3,000 $3,600 Using the high-low method, estimate the cost formula for shipping expense. July
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- Zerbel Company, a wholesaler of large, custom-built air conditioning units for commercial buildings, has noticed considerable fluctuation in its shipping expense from month to month, as shown below:Month Units Shipped Total Shipping ExpenseJanuary. . . . . . . . . . 4 $2,200February . . . . . . . . .7 $3,100March . . . . . . . . . . .5 $2,600April . . . . . . . . . . . . 2 $1,500May . . . . . . . . . . . . . 3 $2,200June . . . . . . . . . . . . . 6 $3,000July . . . . . . . . . . . . . .8 $3,600Required:1. Prepare a scatter graph using the data given above. Plot cost on the vertical axis and activity on the horizontal axis. Is there an approximately linear relationship between shipping expense and the number of units shipped?2. Using the high-low method, estimate the cost formula for shipping expense. Draw a straight line through the high and low data points shown in the scatter graph that you prepared in requirement 1. Make sure your line intersects the Y axis.3. What factors, other…a. Using the least squares method, develop the equation for predicting weekly receiving report costs based on the number of shipments received. b. What is the predicted amount of receiving report costs for a month (assume a month is exactly four weeks) in which 165 shipments are received?Apples & Oranges Inc. is trying to become more efficient in shipping goods. It is experimenting with two new shipping procedure initiatives aimed at achieving this strategic objective. The company has provided the following data regarding the two procedures after one month of implementation: Line Item Description Shipping Procedure A Shipping Procedure B Number of shipping errors 144 120 Hours from ordered to shipped 17.3 20.2 Shipping time (hours from shipped to delivered) 6.7 9.5 Pounds of goods shipped 1,520,000 720,000 Number of shipments 400 300 This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below. Open spreadsheet a. Compute the following performance metrics for each…
- LO.4 (High-low method) Wyoming Wholesale has gathered the following data on the number of shipments received and the cost of receiving reports for the first seven weeks of 2013. Number ofShipments Received Weekly Cost ofReceiving Reports 50 $175 44 162 40 154 35 142 53 185 58 200 60 202 a. Using the high-low method, develop the equation for predicting weekly receiving report costs based on the number of shipments received.b. What is the predicted amount of receiving report costs for a week in which 72 shipments are received?Fisk Corporation is trying to improve its inventory control system and has installed an online computer at its retail stores. Fisk anticipates sales of 60,500 units per year, an ordering cost of $12 per order, and carrying costs of $1.20 per unit.a. What is the economic ordering quantity?___________Units b. How many orders will be placed during the year? __________Orders c. What will the average inventory be? ____________Units d. What is the total cost of ordering and carrying inventory? $____________Memofax Inc. produces memory enhancement kits for fax machines. Sales have been very erratic, with some months showing a profit and some months showing a loss. The company's contribution format income statement for the most recent month is given below. Sales (12,600 units at $40 per unit $504,000 Variable 202.40 *
- Memofax Inc. produces memory enhancement kits for fax machines. Sales have been very erratic, with some months showing a profit and some months showing a loss. The company's contribution format income statement for the most recent month is given below. Sales (12,600 units at $40 per unit $504,000 Variable expenses Contribution margin Fixed expenses 302,400 201,600 Net operating loss 225,600 $(24,000) The sales manager feels that a $7,700 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will result in a $73,000 increase in monthly sales. If the sales manager is right, what will the revised net operating income or loss?Transcribed Image Text: You have been hired as a financial manager by Alpha Company which sells 2,700 of car batteries per year, and places orders for 600 of metals. The Company has no safety stocks. Moreover, the financial analyst estimates a 50% probability of no shortages in each cycle, and the likelihood of inventory shortages of 10, 20, and 30 units as 0.25, 0.15, and 0.10 respectively. The carrying cost per unit per year is $2. The stockout cost is $5, What is the optimal level of safety stock should you recommend? You plan to consider safety stock of 0, 10, 20, and 30 units.Hult Games buys electronic components for manufacturing from two suppliers, Milan Components and Dundee Parts. If the components are delivered late, the shipment to the customer is delayed. Delayed shipments lead to contractual penalties that call for Hult to reimburse a portion of the purchase price to the customer. During the past quarter, the purchasing and delivery data for the two suppliers showed the following. Milan Dundee Total Total purchases (cartons) 98,000 42,000 140,000 Average purchase price (per carton) $ 20.00 $ 22 $ 20.60 Number of deliveries 80 20…
- Bambino Sporting Goods makes baseball gloves that are very popular in the spring and early summer season. Units sold are anticipated as follows: Monthly Unit Sales 3,200 7,200 11,400 9,400 March April May June 31,200 Total units sold If seasonal production is used, it is assumed that inventory will directly match sales for each month and there will be no inventory buildup. The production manager thinks the preceding assumption is too optimistic and decides to go with level production to avoid being out of merchandise. He will produce the 31,200 units over four months at a level of 7,800 per month. a. What is the ending inventory at the end of each month? Compare the unit sales to the units produced and keep a running total. Ending Inventory March units April units May units June units8. Day Mail Order Co. applied the high-low method of cost estimation to customer order data for the first four months of 2020. What is the estimated variable order filing cost component per order? Orders 1,200 1,300 1,800 1,700 Costs Р3,120 3,185 January February March 4,320 3,895 April а. Р2.00 b. P2.42 с. Р2.48 d. P2.50 e. None of these; answer isQuick-Copy Duplicating Company uses 110,000 reams of standard-size paper a year at its various duplicating centers. Its current paper supplier charges $2.00 per ream. Annual inventory carrying costs are 15 percent of inventory value. The costs of placing and receiving an order of paper are $41.25. Assuming that inventory replenishment occurs virtually instantaneously, determine the following: a. The firm's EOQ b. The total annual inventory costs of this policy c. The optimal ordering frequency d. Compute and plot ordering costs, carrying costs, and total inventory costs for order quantities of 2,000, 4,000, 5,000, 5,500, 6,000, 7,000, and 9,000 reams. Connect the points on each function with a smooth curve, and determine the EOQ from the graph (and the table used in constructing the graph).
