Green Tees, an on line retailer of t-shirts, orders 100,000 t-shirts per year from its manufacturer. Green Trees plans on ordering t-shirts several times over the next year. The firm receives 2,500 t-shirts each time it orders. The carrying cost is $0.10 per shirt per year. The order cost is $500 per order. What is the annual ordering cost of the t-shirt inventory (rounded to the nearest dollar)?
Q: purchase price. It costs the Book Shop $500 to place a single order. The maximum sale for the Book…
A:
Q: Iguana inc. manufactures bamboo picture frames that sell for 20 dollars each. each frame requires 4…
A: Solution 1: Sales Budget - Iguana Inc. Particulars April May June 2nd Quarter Total…
Q: Martin company uses 625 units of a part each year. The cost of placing one order is $8; the cost of…
A: Economic order Quantity (EOQ) = [(2*Annual Demand * Set up cost)/Carrying cost]
Q: A retailer anticipates selling 4,050 units of its product at a uniform rate over the next year. Each…
A: Economic order quantity is the optimal quantity to be ordered to minimize the total cost.
Q: Iguana, Inc., manufactures bamboo picture frames that sell for $25 each. Each frame requires 4…
A: A cash budget outlines the predicted sources and spending of cash over a given time period. This…
Q: A microbrewery purchases malt for production. The supplier charges $35 for delivery (no matter how…
A: Hi student Since there are multiple subparts, we will answer only first three subparts. If you want…
Q: A Store has annual demand of 29,000 units. The annual carrying cost for a unit is $15.5, and the…
A:
Q: Iguana, Inc., manufactures bamboo picture frames that sell for $25 each. Each frame requires 4…
A: A sales budget is a financial strategy that forecasts a business's overall income for a given time…
Q: Bulldogs Inc. expects to use 48,000 boxes of chocolate per year costing P12 per box. Inventory…
A: Total Boxes = 48,000 Cost per Box = P12 Inventory carrying cost = 20% Safety stock = 2,400 Order per…
Q: The Xenopeltis Company estimates its requirement, which is 39,000 units semiannually at a price of…
A: EOQ = Square root of [(2*Annual demand*Ordering cost)/(Price per unit * Carrying cost%)] EOQ =…
Q: Iguana, Inc., manufactures bamboo picture frames that sell for $20 each. Each frame requires 4…
A: Budgeting - Budgeting is the process of estimating future operations based on past performance. %…
Q: Iguana, Inc., manufactures bamboo picture frames that sell for $25 each. Each frame requires 4…
A: Budgeting appears to be the method of designing how you might spend your money. This financial plan…
Q: Samsung uses 600 touch-screen glasses a month to manufacture cell phones. Each touch screen-glass…
A: If the company is using 600 units a month so it will order units every month. Therefore, number of…
Q: Dream Corporation is trying to improve its inventory control system and has installed an online…
A: Economic Order Quantity represents the optimal quantity to be purchased while placing every order…
Q: Iguana, Inc., manufactures bamboo picture frames that sell for $20 each. Each frame requires 4…
A: Solution: Compuatation of Unit Product Cost - Iguana Inc. Particulars Per Unit Cost Direct…
Q: Scouts Corp. projects its sales to be 1,000 units this year. As a result of holding inventories,…
A: Part 1:-Reorder Point It is the level of inventory at which we need to replenish the inventory…
Q: he General Chemical Company uses 150,000 gallons of hydrochloric acid per month. The cost of…
A: Economic order quantity is that level of reorder quantity which minimizes the total cost of carrying…
Q: mith Inc. expects to use 96,000 litters of paint annually costing P12 per litter. Inventory carrying…
A: Inventory carrying cost is the cost of keeping items in stock. The larger the volume of inventory,…
Q: Carrefour estimates an annual demand of a grocery product at 4800 kgs. It costs RO 100 to make and…
A: Inventory level at which business should place order is known as reorder point in business.
Q: What is the economic ordering quantity for chips?
A: The optimum units of any given product that must be ordered such that its ordering and holding…
Q: Scouts Corp. projects its sales to be 1,000 units this year. As a result of holding inventories,…
A:
Q: Green Tees, an on line retailer of t-shirts, orders 10,000 t-shirts per year from its manufacturer.…
A: Optimal order quantity is also called economic order quantity and is the most cost-effective amount…
Q: The I-75 Carpet Discount Store has an annual demand of 10,000 yards of Super Shag carpet. The annual…
A: Given information is: The I-75 Carpet Discount Store has an annual demand of 10,000 yards of Super…
Q: Meijer stores carries a specialty line of flavored syrups. One of the most popular of these is…
A:
Q: A local TV repairs shop uses 36,000 units of a part each year (A maximum consumption of 100 units…
A: 1) Computation of Economic Order Quantity Annual Demand = 36,000 units Ordering Cost = 20per order…
Q: Jim Overstreet, inventory control manager for Itex, receives wheel bearings from Wheel-Rite, a small…
A: Economic Order Quantity- The EOQ model is used when demand for goods and services remains constant…
Q: National Co. uses about 200,000 yards of a particular fabric each year. The fabric costs P25 per…
A: The total annual cost is the cost of all the product cost including fixed and variable both. The…
Q: a, Inc., manufactures bamboo picture frames that sell for $25 each. Each frame requires 4 linear…
A: Solution: Budgeted cash receipts includes cash collection for sales or from accounts receivable.…
Q: Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The…
A: Formula: Annual Ordering cost units = Plastic housing units each year / Current year plastic housing…
Q: TRIUMPHANT Company manufactures wood chairs that sell for USD25 each. Each chair requires 4 linear…
A:
Q: Charlotte sells widgets which cost $50 each to purchase and prepare for sale. Annual sales are…
A: Economic order quantity can be defined as that level of order of for a raw material where carrying…
Q: 8 per order. Orders are placed on an “as required” basis and the coffee bar occasionally runs…
A: Economic order quantity is the most cost efficient quantity that should be ordered.
Q: TS Co has daily demand for ball bearings of 40 a day for each of the 250 working days (50 weeks) of…
A: We have the following information: TS Co has daily demand for ball bearings of 40 a day for each of…
Q: A local distributor for a national tire company expects to sell approximately 9,600 steel-belted…
A: Economic order quantity refers to the optimal amount of inventory a company should purchase in order…
Q: Bulldogs Inc. expects to use 48,000 boxes of chocolate per year costing P12 per box. Inventory…
A: Solution:- Carrying cost of inventory means the cost incurred in order to store the inventory.
Q: At the beginning of the year, Boatwise Corporation has 610 life vests in inventory. The company…
A: Production means the number of units produced during the specified period. It is not always…
Q: Clothes, Inc., has an average annual demand for red, medium polo shirts of 25,000 units. The cost of…
A: Cost accounting is one of the important branch of accounting. Under this branch, all type of costs…
Q: A company has a contract to supply 5,000 units of an item per year to the retail store. An estimated…
A: Compute EOQ as follows:
Q: Cash & Credit Supermarket Inc. currently asks its credit customers to pay by the end of the month…
A: Net cost/benefit Analysis: It analyses the benefits of a decision and the costs associated with the…
Q: Inc. expects to use 48,000 boxes of chocolate per year costing P12 per box. Inventory carrying cost…
A: Solution:- Carrying cost of inventory means the holding cost of inventory paid in order to store and…
Q: TRIUMPHANT Company manufactures wood chairs that sell for USD25 each. Each chair requires 4 linear…
A: The financial position of the company can be arrived from the income statement prepared by the…
Q: Iguana, Inc., manufactures bamboo picture frames that sell for $30 each. Each frame requires 4…
A: GIVEN Iguana, Inc., manufactures bamboo picture frames that sell for $30 each. Each frame…
Q: Bulldogs Inc. expects to use 96,000 litters of paint annually costing P12 per litter. Inventory…
A: Carrying cost includes cost of store staff Interest of the locked up capital Cost of obsolescence…
Q: The Big Buy Supermarket stocks Munchies Cereal. Demand for Munchies is 4,000 boxes peryear (365…
A: Annual inventory cost: It can be defined as the total expense incurred in respect of the holding and…
Q: a) Kwik supermart has ordered the following supplies over the last year from various suppliers:…
A: Solution:- Average price charged by the new supplier will be the 11% less than the average of the…
Q: Dream Corporation is trying to improve its inventory control system and has installed an online…
A: The inventory control system is a type of technological solution that helps in managing and tracking…
Green Tees, an on line retailer of t-shirts, orders 100,000 t-shirts per year from its manufacturer. Green Trees plans on ordering t-shirts several times over the next year. The firm receives 2,500 t-shirts each time it orders. The carrying cost is $0.10 per shirt per year. The order cost is $500 per order. What is the annual ordering cost of the t-shirt inventory (rounded to the nearest dollar)?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- 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?Earthies Shoes has 55% of its sales in cash and the remainder on credit. Of the credit sales, 70% is collected in the month of sale, 15% is collected the month after the sale, and 10% is collected the second month after the sale. How much cash will be collected in June if sales are estimated as $75,000 in April, $65,000 in May, and $90,000 in June?This year, Hassell Company will ship 4,000,000 pounds of chocolates to customers with total order-filling costs of 900,000. There are two types of customers: those who order 50,000 pound lots (small customers) and those who order 250,000 pound lots (large customers). Each customer category is responsible for buying 1,500,000 pounds. The selling price per pound is 2 per lb for the 50,000 pound lot and 3 per lb for the larger lots, due to differences in the type of chocolate. ABC would likely assign order-filling costs to the customer type as follows: a. 450,000, small; 450,000, large (using pounds as the driver) b. 360,000, small; 540,000, large (using revenue as the driver) c. 750,000, small; 150,000, large (using number of orders as the driver) d. 450,000, small; 450,000, large (using customer type as the driver)
- Halifax Shoes has 30% of its sales in cash and the remainder on credit. Of the credit sales, 65% is collected in the month of sale, 25% is collected the month after the sale, and 5% is collected the second month after the sale. How much cash will be collected in August if sales are estimated as $75,000 in June, $65,000 in July, and $90,000 in August?Elliott, Inc., has four salaried clerks to process purchase orders. Each clerk is paid a salary of 25,750 and is capable of processing as many as 6,500 purchase orders per year. Each clerk uses a PC and laser printer in processing orders. Time available on each PC system is sufficient to process 6,500 orders per year. The cost of each PC system is 1,100 per year. In addition to the salaries, Elliott spends 27,560 for forms, postage, and other supplies (assuming 26,000 purchase orders are processed). During the year, 25,350 orders were processed. Required: 1. Classify the resources associated with purchasing as (1) flexible or (2) committed. 2. Compute the total activity availability, and break this into activity usage and unused activity. 3. Calculate the total cost of resources supplied (activity cost), and break this into the cost of activity used and the cost of unused activity. 4. (a) Suppose that a large special order will cause an additional 500 purchase orders. What purchasing costs are relevant? By how much will purchasing costs increase if the order is accepted? (b) Suppose that the special order causes 700 additional purchase orders. How will your answer to (a) change?Cadre, Inc., sells a single product with a selling price of $120 and variable costs per unit of $90. The companys monthly fixed expenses are $180,000. What is the companys break-even point in units? What is the companys break-even point in dollars? Prepare a contribution margin income statement for the month of October when they will sell 10,000 units. How many units will Cadre need to sell in order to realize a target profit of $300,000? What dollar sales will Cadre need to generate in order to realize a target profit of $300,000? Construct a contribution margin income statement for the month of August that reflects $2,400,000 in sales revenue for Cadre, Inc.
- Sports Socks has a policy of always paying within the discount period and each of its suppliers provides a discount of 2% if paid within 10 days of purchase. Because of the purchase policy, 85% of its payments are made in the month of purchase and 15% are made the following month. The direct materials budget provides for purchases of $129,582 in November, $294,872 in December, $239,582 in January, and $234,837 in February. What is the balance in accounts payable for January 31, and February 28?NoFat manufactures one product, olestra, and sells it to large potato chip manufacturers as the key ingredient in nonfat snack foods, including Ruffles, Lays, Doritos, and Tostitos brand products. For each of the past 3 years, sales of olestra have been far less than the expected annual volume of 125,000 pounds. Therefore, the company has ended each year with significant unused capacity. Due to a short shelf life, NoFat must sell every pound of olestra that it produces each year. As a result, NoFats controller, Allyson Ashley, has decided to seek out potential special sales offers from other companies. One company, Patterson Union (PU)a toxic waste cleanup companyoffered to buy 10,000 pounds of olestra from NoFat during December for a price of 2.20 per pound. PU discovered through its research that olestra has proven to be very effective in cleaning up toxic waste locations designated as Superfund Sites by the U.S. Environmental Protection Agency. Allyson was excited, noting that This is another way to use our expensive olestra plant! The annual costs incurred by NoFat to produce and sell 100,000 pounds of olestra are as follows: In addition, Allyson met with several of NoFats key production managers and discovered the following information: The special order could be produced without incurring any additional marketing or customer service costs. NoFat owns the aging plant facility that it uses to manufacture olestra. NoFat incurs costs to set up and clean its machines for each production run, or batch, of olestra that it produces. The total setup costs shown in the previous table represent the production of 20 batches during the year. NoFat leases its plant machinery. The lease agreement is negotiated and signed on the first day of each year. NoFat currently leases enough machinery to produce 125,000 pounds of olestra. PU requires that an independent quality team inspects any facility from which it makes purchases. The terms of the special sales offer would require NoFat to bear the 1,000 cost of the inspection team. Based solely on financial factors, explain why NoFat should accept or reject PUs special sales offer.NoFat manufactures one product, olestra, and sells it to large potato chip manufacturers as the key ingredient in nonfat snack foods, including Ruffles, Lays, Doritos, and Tostitos brand products. For each of the past 3 years, sales of olestra have been far less than the expected annual volume of 125,000 pounds. Therefore, the company has ended each year with significant unused capacity. Due to a short shelf life, NoFat must sell every pound of olestra that it produces each year. As a result, NoFats controller, Allyson Ashley, has decided to seek out potential special sales offers from other companies. One company, Patterson Union (PU)a toxic waste cleanup companyoffered to buy 10,000 pounds of olestra from NoFat during December for a price of 2.20 per pound. PU discovered through its research that olestra has proven to be very effective in cleaning up toxic waste locations designated as Superfund Sites by the U.S. Environmental Protection Agency. Allyson was excited, noting that This is another way to use our expensive olestra plant! The annual costs incurred by NoFat to produce and sell 100,000 pounds of olestra are as follows: In addition, Allyson met with several of NoFats key production managers and discovered the following information: The special order could be produced without incurring any additional marketing or customer service costs. NoFat owns the aging plant facility that it uses to manufacture olestra. NoFat incurs costs to set up and clean its machines for each production run, or batch, of olestra that it produces. The total setup costs shown in the previous table represent the production of 20 batches during the year. NoFat leases its plant machinery. The lease agreement is negotiated and signed on the first day of each year. NoFat currently leases enough machinery to produce 125,000 pounds of olestra. PU requires that an independent quality team inspects any facility from which it makes purchases. The terms of the special sales offer would require NoFat to bear the 1,000 cost of the inspection team. Assume for this question that NoFat rejected PUs special sales offer because the 2.20 price suggested by PU was too low. In response to the rejection, PU asked NoFat to determine the price at which it would be willing to accept the special sales offer. For its regular sales, NoFat sets prices by marking up variable costs by 10%. If Allyson decides to use NoFats 10% markup pricing method to set the price for PUs special sales offer, a. Calculate the price that NoFat would charge PU for each pound of olestra. b. Calculate the relevant profit that NoFat would earn if it set the special sales price by using its markup pricing method. (Hint: Use the estimate of relevant costs that you calculated in response to Requirement 1b.) c. Explain why NoFat should accept or reject the special sales offer if it uses its markup pricing method to set the special sales price.
- NoFat manufactures one product, olestra, and sells it to large potato chip manufacturers as the key ingredient in nonfat snack foods, including Ruffles, Lays, Doritos, and Tostitos brand products. For each of the past 3 years, sales of olestra have been far less than the expected annual volume of 125,000 pounds. Therefore, the company has ended each year with significant unused capacity. Due to a short shelf life, NoFat must sell every pound of olestra that it produces each year. As a result, NoFats controller, Allyson Ashley, has decided to seek out potential special sales offers from other companies. One company, Patterson Union (PU)a toxic waste cleanup companyoffered to buy 10,000 pounds of olestra from NoFat during December for a price of 2.20 per pound. PU discovered through its research that olestra has proven to be very effective in cleaning up toxic waste locations designated as Superfund Sites by the U.S. Environmental Protection Agency. Allyson was excited, noting that This is another way to use our expensive olestra plant! The annual costs incurred by NoFat to produce and sell 100,000 pounds of olestra are as follows: In addition, Allyson met with several of NoFats key production managers and discovered the following information: The special order could be produced without incurring any additional marketing or customer service costs. NoFat owns the aging plant facility that it uses to manufacture olestra. NoFat incurs costs to set up and clean its machines for each production run, or batch, of olestra that it produces. The total setup costs shown in the previous table represent the production of 20 batches during the year. NoFat leases its plant machinery. The lease agreement is negotiated and signed on the first day of each year. NoFat currently leases enough machinery to produce 125,000 pounds of olestra. PU requires that an independent quality team inspects any facility from which it makes purchases. The terms of the special sales offer would require NoFat to bear the 1,000 cost of the inspection team. Assume for this question that Allysons relevant analysis reveals that NoFat would earn a positive relevant profit of 10,000 from the special sale (i.e., the special sales alternative). However, after conducting this traditional, short-term relevant analysis, Allyson wonders whether it might be more profitable over the long term to downsize the company by reducing its manufacturing capacity (i.e., its plant machinery and plant facility). She is aware that downsizing requires a multiyear time horizon because companies usually cannot increase or decrease fixed plant assets every year. Therefore, Allyson has decided to use a 5-year time horizon in her long-term decision analysis. She has identified the following information regarding capacity downsizing (i.e., the downsizing alternative): The plant facility consists of several buildings. If it chooses to downsize its capacity, NoFat can immediately sell one of the buildings to an adjacent business for 30,000. If it chooses to downsize its capacity, NoFats annual lease cost for plant machinery will decrease to 9,000. Therefore, Allyson must choose between these two alternatives: Accept the special sales offer each year and earn a 10,000 relevant profit for each of the next 5 years or reject the special sales offer and downsize as described above. Assume that NoFat pays for all costs with cash. Also, assume a 10% discount rate, a 5-year time horizon, and all cash flows occur at the end of the year. Using an NPV approach to discount future cash flows to present value, a. Calculate the NPV of accepting the special sale with the assumed positive relevant profit of 10,000 per year (i.e., the special sales alternative). b. Calculate the NPV of downsizing capacity as previously described (i.e., the downsizing alternative). c. Based on the NPV of Requirements 5a and 5b, identify and explain which of these two alternatives is best for NoFat to pursue in the long term.Kerr Manufacturing sells a single product with a selling price of $600 with variable costs per unit of $360. The companys monthly fixed expenses are $72,000. What is the companys break-even point in units? What is the companys break-even point in dollars? Prepare a contribution margin income statement for the month of January when they will sell 500 units. How many units will Kerr need to sell in order to realize a target profit of $120,000? What dollar sales will Kerr need to generate in order to realize a target profit of $120,000? Construct a contribution margin income statement for the month of June that reflects $600,000 in sales revenue for Kerr Manufacturing.Deuce Sporting Goods manufactures a high-end model tennis racket. The company’s forecasted income statement for the year, before any special orders, is as follows: Fixed costs included in the forecasted income statement are $400,000 in manufacturing cost of goods sold and $200,000 in selling expenses. A new client placed a special order with Deuce, offering to buy 1,000 tennis rackets for $100.00 each. The company will incur no additional selling expenses if it accepts the special order. Assuming that Deuce has sufficient capacity to manufacture 1,000 more tennis rackets, by what amount would differential income increase (decrease) as a result of accepting the special order? (Hint: First compute the variable cost per unit relevant to this decision.)
