An item sells for P25 a unit, but a 10% discount is offered for lots of 150 units or more.A company uses this item at the rate of 20 units per day. The set up cost for orderinga lot is P50, and the holding cost per unit per day is P0.30. should the company takeadvantage of the discount?

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Answered: An item sells for P25 a unit, but a 10%…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter21: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 10MC

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Markson and Sons leases a copy machine with terms that include a fixed fee each month of $500 plus a charge for each copy made. The company uses the high-low method to analyze costs. If Markson paid $360 for 5,000 copies and $280 for 3,000 copies, how much would Markson pay if it made 7,500 copies?
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An item sells for P25 a unit, but a 10% discount is offered for lots of 150 units or more. A company uses this item at the rate of 20 units per day. The set up cost for ordering a lot is P50, and the holding cost per unit per day is P0.30. should the company take advantage of the discount?