F3-5 A suppller sells MF Tires to dealers. The annual demand is approxlmately 1,000 tires. The supplier pays P50 for each tire and estimates that the annual holding cost Is 20 percent of the total value of tires. It costs approximately P25 to place an order. The suppller cuIrently orders 80 tires per month. Required: Calculate ordering, holding, and total inventory costs for the current ordered quantity. a. b. Determine the EOQ.

F3-5 A suppller sells MF Tires to dealers. The annual demand is approxlmately 1,000 tires. The supplier pays P50 for each tire and estimates that the annual holding cost Is 20 percent of the total value of tires. It costs approximately P25 to place an order. The suppller cuIrently orders 80 tires per month. Required: Calculate ordering, holding, and total inventory costs for the current ordered quantity. a. b. Determine the EOQ.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter18: The Management Of Accounts Receivable And Inventories

Section: Chapter Questions

Problem 17P

See similar textbooks

Similar questions

Johnson Corporation had beginning inventory of 20,000 at cost and 35,000 at retail. During the year, it made net purchases of 180,000 at cost and 322,000 at retail. Johnson nude sales of 300,000. Assuming a price index of 100 at the beginning of the year and 110 at the end of the year, compute Johnsons ending inventory at cost using the dollar-value LIFO retail method.
Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The cost of placing an order is 30. The cost of holding one unit of inventory for one year is 15.00. Currently, Ottis places 160 orders of 4,000 plastic housing units per year. Required: 1. Compute the annual ordering cost. 2. Compute the annual carrying cost. 3. Compute the cost of Ottiss current inventory policy. Is this the minimum cost? Why or why not?
Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The cost of placing an order is 30. The cost of holding one unit of inventory for one year is 15.00. Currently, Ottis places 160 orders of 4,000 plastic housing units per year. Required: 1. Compute the economic order quantity. 2. Compute the ordering, carrying, and total costs for the EOQ. 3. How much money does using the EOQ policy save the company over the policy of purchasing 4,000 plastic housing units per order?
Zonker Inc. purchases 500 units of an item at an invoicecost of $30,000. What is the cost per unit? If the goods areshipped f.o.b. shipping point and the freight bill was$1,500, what is the cost per unit if Zonker Inc. pays thefreight charges? If these items were bought on 2/10, n/30terms and the invoice and the freight bill were paid withinthe 10-day period, what would be the cost per unit?
A supplier sells MF Tires to dealers. The annual demand is approximately1,000 tires. The supplier pays P50 for each tire and estimates that the annualholding cost is 20 percent of the total value of tires. It costs approximatelyP25 to place an order. The supplier currently orders 80 tires per month.Required:a. Calculate ordering, holding, and total inventory costs for thecurrent ordered quantity.b. Determine the EOQ.c. How many orders will be placed per year using the EOQ?d. Calculate ordering, holding, and total inventory costs for the EOQand also determine the change in total inventory cost.
Assume Wyteboard Corp. markers uses 1,440,000 gallons of ink each year. Assume Palmer will order the ink at a rate of P2 per gallon plus a fixed cost of P100 per order. At cost, the firm's carrying cost is 20% of the inventory value. What is Wyteboard's minimum costs of ordering and holding inventory? SHOW THE ANSWER IN A GOOD ACCOUNTING FORM
The following is Cullumber Company’s income statement for the past year. Sales revenue $336,000 Cost of goods sold 134,400 Gross margin 201,600 Operating expenses 145,600 Operating income $56,000 If the company wants to sell a new product that costs $49 wholesale while keeping the same markup structure, what will be the price of the new product? (Use the gross margin percentage and round final answer to 2 decimal places, e.g. 25,124.25.) Price of the new product $enter the price of the new product in dollars rounded to 2 decimal places
Assume Wyteboard Corp. markers uses 1,440,000 gallons of ink each year. Assume Palmer will order the ink at a rate of P2 per gallon plus a fixed cost of P100 per order. At cost, the firm's carrying cost is 20% of the inventory value. What is Wyteboard's minimum costs of ordering and holding inventory?Please provide a solution
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?
The data during the month of an enterprise who sells product M are as follows: Sale of 2,000 units at the before-VAT price of VND 300,000/unit in the domestic market. Export 500 units at FOB price of VND 310,000/ unit. Purchase 1,000 units with before-VAT price of VND 250,000/ unit. Purchase 300 units with price of VND 280,000/unit stated on the sale invoice. Deductible Input VAT for other purchased services: VND 1,000,000. VAT rate 10%. Exported goods are supported with sufficient documents as prescribed by law The VAT amount payable is * VND 41,100,000 VND 25,600,000 VND 49,500,000 VND 34,000,000
Tiger Corporation purchases 1,400,000 units per year of one component. The fixed cost per order is $55. The annual carrying cost of the item is 27% of its $10 cost. Determine the EOQ if (1) the conditions stated above hold, (2) the order cost is $1 rather than $55, and (3) the order cost is $55 but the carrying cost is $0.01. What do your answers illustrate about the EOQ model? Explain.
State Company manufactured a machine at a cost of $80,000. The product is sold for $88,000 at a 5% discount. The delivery costs are estimated to be $8,000. Under IFRS, how much should be the carrying amount of this inventory? $75,600 $80,000 $72,000 $88,000