Based on an EOQ analysis (assuming a constant demand), the optimal order quantity is 2,500. The company desires a safety stock of 500 units. A 5-day lead time is needed for delivery. Annual inventory carrying costs equal 25% of the average inventory level. The company pays P4 per unit to buy the product, which it sells for P8. The company pays P150 to place a detailed order, and the monthly demand for the product is 4,000 units. Compute for the annual inventory carrying costs. *

Based on an EOQ analysis (assuming a constant demand), the optimal order quantity is 2,500. The company desires a safety stock of 500 units. A 5-day lead time is needed for delivery. Annual inventory carrying costs equal 25% of the average inventory level. The company pays P4 per unit to buy the product, which it sells for P8. The company pays P150 to place a detailed order, and the monthly demand for the product is 4,000 units. Compute for the annual inventory carrying costs. *

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter11: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 11.3.2MBA: Margin of safety Use the data from E11-12 and assume that break-even sales are $2,798 million....

See similar textbooks

Similar questions

E6.14 (LO 4), AN The single-column CVP income statements shown below are available for Armstrong Company and Contador Company. Armstrong Co. Contador Co.Sales $500,000 $500,000Variable costs 240,000 50,000Contribution margin 260,000 450,000Fixed costs 160,000 350,000Net income $100,000 $100,000Instructions Compute the degree of operating leverage for each company and interpret your results.Assuming that sales revenue increases by 10%, restate the single-column CVP income statement from above for each company.Discuss how the cost structure of these two companies affects their operating leverage and profitability.Compute degree of operating leverage and evaluate impact of alternative cost structures on net income and margin of safety.
Consider a firm with a 2010 revenue of S60 million and cost of goods sold of $25 million lf the balance shert amount show $4million of inventory and $1.5 million ofproperty, plant & equipment how many weeks of suppiy does the fim bolat(2 weeksinoneyear)(use 2 decimals)Select oneO a.8.33O b.6.25Oc 13.75O d. 400Oe 12.50
Operating leverage is 7 and financial leverage is 2.2858. How much change in sales will be required to bring 70% change in EBIT? O a. 10% O b. 11.429% O C. 30% O d. 70%
CH11_HW_QA3_LA Required 1: Compute the company’s return on investment (ROI) for the period using the ROI formula stated in terms of margin and turnover. (Round your intermediate calculations and final answer to 2 decimal places.) Margin % Turnover ROI % Required 2: Using Lean Production, the company is able to reduce the average level of inventory by $95,000. (The released funds are used to pay off short-term creditors.) (Round your intermediate calculations and final answers to 2 decimal places.) Effect Margin % Turnover ROI % Required 3: The company achieves a cost savings of $14,000 per year by using less costly materials. (Round your intermediate calculations and final answers to 2 decimal places.) Effect Margin % Turnover ROI % Required 4: The company issues bonds and uses the proceeds to…
CH11_HW_QA3_PIR Required 1: Compute the company’s return on investment (ROI) for the period using the ROI formula stated in terms of margin and turnover. (Round your intermediate calculations and final answer to 2 decimal places.) Margin not attempted % Turnover not attempted ROI not attempted % Required 2: Using Lean Production, the company is able to reduce the average level of inventory by $96,000. (The released funds are used to pay off short-term creditors.) (Round your intermediate calculations and final answers to 2 decimal places.) Effect Margin % Turnover ROI % Required 3: The company achieves a cost savings of $14,000 per year by using less costly materials. (Round your intermediate calculations and final answers to 2 decimal places.) Effect Margin % Turnover ROI % Required 4: The…
Margin of safety Use the data from E11-12 and assume that break-even sales are $2,798 million. Determine the following for Molson-Coors Brewing Company. Round to one decimal place. Margin of safety expressed as a percentage.
13. How do I graph this? Laurel, Inc. Hardy Corp. Price Today $1,000.00 $1,000.00 Price @ 7.8% YTM $947.41 $799.09 Price @ 3.8 YTM $1,056.20 $1,278.41 % change in price if rates rise -5.26% -20.09% % change in price if rates fall 5.62% 27.84%
Given the following information, answer the following questions. TR = $4.5Q TC = $3,500 + $2Q a.) What is the break-even level of output? b.) If the firm sells 1300 units what are its earnings or losses? c.) If sales rise to 2,300 units, what are the firm's earnings or losses?
A business has selling price of P 129.50 with an average variable cost of P 54.40. Fixed costs are P 1,400,000. Calculate the following: What is the breakeven sales revenue? Use 2 decimal places in computing CM Ratio (Answer the figures only; no decimal places)
RedRed Hawk, Incorporated, is considering a change in its cash-only sales policy. The new terms of sale would be net one month. The required return is .84 percent per month. Current PolicyNew PolicyPrice per unit$ 980$ 980Cost per unit$ 790$ 790Unit sales per month1,0401,120 Calculate the NPV of the decision to switch. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
47-Assume that you are working as an Accounting manager in Nizwa SAOG. One of your senior manager provided you the following data and asked you to find out the P/v ratio. Total production for the year 50000 units and closing stock at the end of the year 20,000 units . Fixed expenses OMR. 5000 and Break-even point OMR. 15,000 and selling price per unit OMR 1.500. O a. 2 O b. 0.77 O c. 0.16 O d. None of the given options
Match the following measurements with the terms below: Question 15 options: 12345 cash conversion efficiency ratio 12345 economic ordering quantity 12345 credit terms 12345 net working capital 12345 days of working capital 1. 5.1% 2. 47.2 days 3. 1/10, n/30 4. $200,000 5. 700 units