2.2Use the information provided below to calculate the following:INFORMATIONMonthly sales of West Ham Limited is 4 400 units at R150 a unit. The purchase price is R90 per unit. The carryingcost amounts to 10% of the purchase price and the ordering cost is R62 per order.INFORMATIONMonthly sales of West Ham Limited is 4 400 units at R150 a unit. The purchase price is R90 per unit. The carryingcost amounts to 10% of the purchase price and the ordering cost is R62 per order.2.2.1Calculate the Economic order quantity (EOQ)2.2.2Calculate the Number of orders that need to be placed for the year

Economic order quantity is that quantity that should be ordered in order to have minimum ordering…

Answered: INFORMATION Monthly sales of West Ham…

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter15: Managing Short-term Assets

Section: Chapter Questions

Problem 17PROB

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Starling Co. manufactures one product with a selling price of 18 and variable cost of 12. Starlings total annual fixed costs are 38,400. If operating income last year was 28,800, what was the number of units Starling sold? a. 4,800 b. 6,400 c. 5,600 d. 11,200
Refer to Cornerstone Exercise 3.4 for data on Dohini Manufacturing Companys purchasing cost and number of purchase orders. The controller for Dohini Manufacturing ran regression on the data, and the coefficients shown by the regression program are: Required: 1. Construct the cost formula for the purchasing activity showing the fixed cost and the variable rate. 2. If Dohini Manufacturing Company estimates that next month will have 430 purchase orders, what is the total estimated purchasing cost for that month? (Round your answer to the nearest dollar.) 3. What if Dohini Manufacturing wants to estimate purchasing cost for the coming year and expects 5,340 purchase orders? What will estimated total purchasing cost be? (Round your answer to the nearest dollar.) What is the total fixed purchasing cost? Why doesnt it equal the fixed cost calculated in Requirement 1?
Waskowski Company sells three products (A. B. and C) with a sales mix of 3:2:1. Unit sales price are shown. What is the sales price per composite unit? A. $17.00 B. $25.00 C. $35.00 D. $20.00
Lotts Company produces and sells one product. The selling price is 10, and the unit variable cost is 6. Total fixed cost is 10,000. Required: 1. Prepare a CVP graph with Units Sold as the horizontal axis and Dollars as the vertical axis. Label the break-even point on the horizontal axis. 2. Prepare CVP graphs for each of the following independent scenarios: (a) Fixed cost increases by 5,000, (b) Unit variable cost increases to 7, (c) Unit selling price increases to 12, and (d) Fixed cost increases by 5,000 and unit variable cost is 7.
Klamath Company produces a single product. The projected income statement for the coming year is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. 2. Suppose 10,000 units are sold above break-even. What is the operating income? 3. Compute the contribution margin ratio. Use the contribution margin ratio to compute the break-even point in sales revenue. (Note: Round the contribution margin ratio to four decimal places, and round the sales revenue to the nearest dollar.) Suppose that revenues are 200,000 more than expected for the coming year. What would the total operating income be?
Sales Needed to Earn Target Income Chillmax Company plans to sell 3,500 pairs of shoes at 60 each in the coming year. Variable cost is 35% of the sales price; contribution margin is 65% of the sales price. Total fixed cost equals 78,000 (includes fixed factory overhead and fixed selling and administrative expense). Required: 1. Calculate the sales revenue that Chillmax must make to earn operating income of 81,900 by using the point in sales equation. 2. Check your answer by preparing a contribution margin income statement based on the sales dollars calculated in Requirement 1.
INFORMATIONMonthly sales of West Ham Limited is 4 400 units at R150 a unit. The purchase price is R90 per unit. The carrying cost amounts to 10% of the purchase price and the ordering cost is R62 per order.INFORMATIONMonthly sales of West Ham Limited is 4 400 units at R150 a unit. The purchase price is R90 per unit. The carrying cost amounts to 10% of the purchase price and the ordering cost is R62 per order. 1.1 Calculate the Economic order quantity (EOQ) 1.2 Calculate the Number of orders that need to be placed for the year
pioneer limited purchases a product which has a steady monthly demand of 20000 units. The product costs R100 per unit. The ordering cost is R5 per order. The holding cost is 10% of the unit purchase price. Which one of the following represents the annual economic order quantity A. 142 B. 980 C. 283 D. 490
Give what is being asked?1. If total cost and Expenses is P300,000 at breakeven point how much is the total sales?2. The unit selling price of a product is P20, if the total sales for the month is 5,000 units and this is the breakeven point sales volume.Answer question A-C with yes or no.a. Will there be an income in case 6,000 units were sold?b. Will be there be an income in case 4,000 units were sold?.c. If additional units were sold after selling 5,000 units will there be an income?d. How much is the total cost and expenses if 5,000 units were sold?
Question 3:A supplier sells Hipoint-brand pens to stationary shops. The annual demand isapproximately 24,000 pens. The supplier pays SR5 for each pen and estimates that theannual holding cost is 30 percent of the pen's value. It costs approximately SR350 to placean order. The supplier currently buys 1000 pens per orderi. Determine the annual ordering and inventory cost (in SR) for current orderquantity.ii. Determine the economic order quantity (EOQ).iii. Determine the total annual cost for the EOQ
MM Co. expects total sales of P10,000. The price per unit is P5. The firm estimates an ordering cost of P7.50 per order, with an inventory cost of P0.70 per unit. What is the optimum order size? A. 147 units B. 207 units C. 327 units D. 463 units
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.

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