Homework Answers
Annual demand, D = 25000 units
Daily demand, d = 25000/250 = 100 units
Setup cost, S = $ 1000
Holding cost, H = 500*20% = $ 100
(a) Economic purchase quantity = sqrt(2DS/H)
= sqrt(2*25000*1000/100)
= 707 units
(b) Time between orders = Q/d
= 707/100
= 7.07 days
(c) Number of orders per year = D/Q
= 25000/707
= 35.4 orders
(d) Optimum shortages = 0 (it is given in the question that shortages are now allowed)
(e) Maximum inventory = Q = 707 units
(f) The time of items being held = time between orders / 2 = 7.07/2 = 3.54 days
(g) The optimum annual cost = Carrying cost + Ordering cost
= H*Q/2+S*D/Q
= 100*707/2+1000*25000/707
= $ 70710.68
Add Answer to:
Us Page 5 of 6 Question 5 (10 marks) Western Technology (WT) assembles PC's for the Australian 25...
QUESTION 6 (18 MARKS) a. Give TWO (2) fundamental decisions that you have to make when controling...
QUESTION 6 (18 MARKS) a. Give TWO (2) fundamental decisions that you have to make when controling inventory. (2 marks) b. The Ross White's machine shop uses 2,500 brackets during the course af a year, and this usage is relatively constant throughout the year. These brackats are purchased from a suppier 100 miles away for $15 each, and the lead time is 2 days. The holding cost per bracket per year is $1.50 (or 10% of the unit cost) and...
[6 marks] Suppose that Australia has a 25% ad valorem import duty on T-shirts and Australian...
[6 marks] Suppose that Australia has a 25% ad valorem import duty on T-shirts and Australian consumers purchase these imported T-shirts at a price of $10 from various fashion outlets. A proposed project would replace 200,000 T-shirts currently imported annually by domestically produced T-shirts. The company hires unemployed domestic labor having an opportunity cost of 20% of the market wage and pays them $600,000 in yearly wages. The project also causes pollution worth $70,000 per year in Australia. The all-inclusive...
I need only question 5 Question 4: (10 marks) (B1, C1) Part A: (7 marks) Fatima...
I need only question 5
Question 4: (10 marks) (B1, C1) Part A: (7 marks) Fatima Company plans to sell 6,000 units at $60 each in the coming year. Variable cost per unit is $12 and total fixed cost is $24,000. Instructions: 1. Calculate the contribution margin ratio? (1 mark) 2. Calculate the break-even point in units? (2marks) 3. Calculate the break-even point in sales dollars? (2 marks) 4. If Fatima Company has a target profit of $90,000, how many...
QUESTION THREE INVENTORY CONTROL Green Lantern, a pub & grill estimates that it will sell 10...
QUESTION THREE INVENTORY CONTROL Green Lantern, a pub & grill estimates that it will sell 10 000 beers per year which it will purchase from a distributor in Luanshya. A beer costs K18.00 to purchase and K2.00 in freight charges each. The company borrows funds at 9 % interest rate to finance inventories. Green Lantern's purchasing agent has calculated that it costs K50.00 to place an order for beers and that the handling is K3.00 for each beer. Required: (a)...
Question 4 (10 marks) You will have the responsibility to become an expert on one inventory...
Question 4 (10 marks) You will have the responsibility to become an expert on one inventory methods (Weighted Average Costing) under the perpetual method. Using the following data, you must show and illustrates the relevant concepts and procedures for your inventory method. You must write the illustration in a format that is clear and understandable with all the steps and details. Data: The company uses a perpetual inventory system. It had the following beginning inventory and current year purchases of...
Q.2 (Max Marks:90) Bombera Ltd operates at capacity and makes glass-topped dining tables and wooden chairs,...
Q.2 (Max Marks:90) Bombera Ltd operates at capacity and makes glass-topped dining tables and wooden chairs, which are then typically sold as sets of four chairs with one table. However, some customers purchase replacement or extra chairs, and others buy some chairs or a table only, so the sales mix is not exactly 4:1. Bombera Ltd is planning its annual budget for the financial year 2018. Information for 2018 follows: Input prices Direct materials Wood $5.30 per board metre Glass...
Question 5 (10 marks) Amanda's Art Supplies has a unit selling price of $500, variable costs per unit of $275 and f...
Question 5 (10 marks) Amanda's Art Supplies has a unit selling price of $500, variable costs per unit of $275 and fixed cost of $129 825. The business's target profit for the year is $180 000. Required: Calculate the following. Provide a formula and show your workings for each. 1) Contribution margin ratio (4 marks) 2) The annual break-even point in sales dollars using the contribution margin approach (2 marks)
QUESTION 2 (25 MARKS) i. Identify and explain each of the below situations whether it is...
QUESTION 2 (25 MARKS) i. Identify and explain each of the below situations whether it is a change in policy, or a change in estimate or an error: The chief financial controller had announced that one line product has lost its customer appeal and will be phased out over the next 2 years. Due to this situation, a decision has been made to lower the estimates lives on related production equipment from the remaining 4 years to 2 years. (CLO2:PLO2:C1)(2...
QUESTION 3: Total of 13 marks This question consists of 5 parts (Parts A, B, C,...
QUESTION 3: Total of 13 marks This question consists of 5 parts (Parts A, B, C, D, and E). All parts must be attempted. The following transactions occurred between Fauci Ltd and its wholly owned subsidiary, Gupta Ltd. All transactions occurred during the year ended 30 June 2020 unless specifically stated otherwise. The company tax rate is 30%. Required: Prepare the adjustment journal entries required to eliminate the intra-group transactions in the consolidation worksheet of Fauci Ltd Group at 30...
1) Emeco Holdings Limited (Emeco) is a company listed on the Australian Securities Exchange (ASX). Emeco...
1) Emeco Holdings Limited (Emeco) is a company listed on the
Australian Securities Exchange (ASX). Emeco is investigating a
proposal to replace one of their outdated earth-moving excavators
with a new CAT 390F excavator. The new excavator has a much larger
carrying capacity, offers improved fuel economy and has lower
maintenance costs compared to the existing excavator. However, the
cost of a brand new CAT 390F is $2.8 million and Emeco’s accountant
is concerned that the net profit of the...
QUESTION 6 (18 MARKS) a. Give TWO (2) fundamental decisions that you have to make when controling inventory. (2 marks) b. The Ross White's machine shop uses 2,500 brackets during the course af a year, and this usage is relatively constant throughout the year. These brackats are purchased from a suppier 100 miles away for $15 each, and the lead time is 2 days. The holding cost per bracket per year is $1.50 (or 10% of the unit cost) and...
[6 marks] Suppose that Australia has a 25% ad valorem import duty on T-shirts and Australian consumers purchase these imported T-shirts at a price of $10 from various fashion outlets. A proposed project would replace 200,000 T-shirts currently imported annually by domestically produced T-shirts. The company hires unemployed domestic labor having an opportunity cost of 20% of the market wage and pays them $600,000 in yearly wages. The project also causes pollution worth $70,000 per year in Australia. The all-inclusive...
I need only question 5
Question 4: (10 marks) (B1, C1) Part A: (7 marks) Fatima Company plans to sell 6,000 units at $60 each in the coming year. Variable cost per unit is $12 and total fixed cost is $24,000. Instructions: 1. Calculate the contribution margin ratio? (1 mark) 2. Calculate the break-even point in units? (2marks) 3. Calculate the break-even point in sales dollars? (2 marks) 4. If Fatima Company has a target profit of $90,000, how many...
QUESTION THREE INVENTORY CONTROL Green Lantern, a pub & grill estimates that it will sell 10 000 beers per year which it will purchase from a distributor in Luanshya. A beer costs K18.00 to purchase and K2.00 in freight charges each. The company borrows funds at 9 % interest rate to finance inventories. Green Lantern's purchasing agent has calculated that it costs K50.00 to place an order for beers and that the handling is K3.00 for each beer. Required: (a)...
Question 4 (10 marks) You will have the responsibility to become an expert on one inventory methods (Weighted Average Costing) under the perpetual method. Using the following data, you must show and illustrates the relevant concepts and procedures for your inventory method. You must write the illustration in a format that is clear and understandable with all the steps and details. Data: The company uses a perpetual inventory system. It had the following beginning inventory and current year purchases of...
Question 5 (10 marks) Amanda's Art Supplies has a unit selling price of $500, variable costs per unit of $275 and fixed cost of $129 825. The business's target profit for the year is $180 000. Required: Calculate the following. Provide a formula and show your workings for each. 1) Contribution margin ratio (4 marks) 2) The annual break-even point in sales dollars using the contribution margin approach (2 marks)
QUESTION 2 (25 MARKS) i. Identify and explain each of the below situations whether it is a change in policy, or a change in estimate or an error: The chief financial controller had announced that one line product has lost its customer appeal and will be phased out over the next 2 years. Due to this situation, a decision has been made to lower the estimates lives on related production equipment from the remaining 4 years to 2 years. (CLO2:PLO2:C1)(2...
QUESTION 3: Total of 13 marks This question consists of 5 parts (Parts A, B, C, D, and E). All parts must be attempted. The following transactions occurred between Fauci Ltd and its wholly owned subsidiary, Gupta Ltd. All transactions occurred during the year ended 30 June 2020 unless specifically stated otherwise. The company tax rate is 30%. Required: Prepare the adjustment journal entries required to eliminate the intra-group transactions in the consolidation worksheet of Fauci Ltd Group at 30...
1) Emeco Holdings Limited (Emeco) is a company listed on the
Australian Securities Exchange (ASX). Emeco is investigating a
proposal to replace one of their outdated earth-moving excavators
with a new CAT 390F excavator. The new excavator has a much larger
carrying capacity, offers improved fuel economy and has lower
maintenance costs compared to the existing excavator. However, the
cost of a brand new CAT 390F is $2.8 million and Emeco’s accountant
is concerned that the net profit of the...
Most questions answered within 3 hours.
-
John needs 40 Eternal Light flashlights. Each Eternal Light
flashlight requires 3 bulbs, and each bulb...
asked 2 minutes from now -
1) If Nominal GDP is $16,000 billion and the GDP deflator is 50,
then Real GDP...
asked 3 minutes ago -
D. A student completed 20 courses in the School of Arts and
Sciences. Her grades in...
asked 1 hour ago -
teo
pucks moving on a frictionless air table are about to collide. the
1.5 kg puck...
asked 1 hour ago -
Problem #1
The area between Z = 0 and Z = 2.50
The area between Z...
asked 3 hours ago -
1. What is the meaning of the term communication style?
2. What are the benefits to...
asked 2 hours ago -
9.) You are buying a car that cost $26,500. You make payments of
$412 each month...
asked 3 hours ago -
. Suppose a discrete random variable has probability
distribution
P(x) = .2 if x = 0...
asked 4 hours ago -
Under the influence of its drive force, a snowmobile is moving
at a constant velocity along...
asked 5 hours ago -
Why do organizations decline? What steps can top
management take to halt, decline, and restore organizational...
asked 4 hours ago -
What mechanisms Drive speciation??
(I.e. what was Dawins theory on the orgin of species, and how...
asked 6 hours ago -
The manager at a car assembly plant believes that the mean
assembly time for a car...
asked 7 hours ago