NUBD normally sells its headphones for P40 each. A discount chain is interesting in purchasing NUBD's excess capacity of 5,000 watches. This special order would not affect regular sales or the cost structure above. NUBD's profits for the year will increase as long as the price on this special order exceeds: * O Do not use money sign. Sample format: 11 or (11) NUBD, Inc. manufactures and sells headphones. NUBD has the capacity to manufacture and sell 20,000 headphones each year but is currently only manufacturing and selling 15,000. The following costs relate to annual operations at 20,000 watches: Variable manufacturing cost. Fixed manufacturing cost. Variable selling and administrative cost, Fixed selling and administrative cost Total Cost P170,000 P120,000 P90,000 P180,000

NUBD normally sells its headphones for P40 each. A discount chain is interesting in purchasing NUBD's excess capacity of 5,000 watches. This special order would not affect regular sales or the cost structure above. NUBD's profits for the year will increase as long as the price on this special order exceeds: * O Do not use money sign. Sample format: 11 or (11) NUBD, Inc. manufactures and sells headphones. NUBD has the capacity to manufacture and sell 20,000 headphones each year but is currently only manufacturing and selling 15,000. The following costs relate to annual operations at 20,000 watches: Variable manufacturing cost. Fixed manufacturing cost. Variable selling and administrative cost, Fixed selling and administrative cost Total Cost P170,000 P120,000 P90,000 P180,000

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints

Section: Chapter Questions

Problem 7E: Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The...

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Carroll Company, a manufacturer of vitamins and minerals, has been asked by a large drugstore chain to provide bottles of vitamin E. The bottles would be labeled with the name of the drugstore chain, and the chain would pay Carroll 2.30 per bottle rather than the 3.00 regular price. Which type of a decision is this? a. Make-or-buy b. Special-order c. Keep-or-drop d. Economic order quantity e. Markup pricing
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?
NUBD normally sells its headphones for P40 each. A discount chain is interesting in purchasing NUBD's excess capacity of 5,000 watches. This special order would not affect regular sales or the cost structure above. NUBD's profits for the year will increase as long as the price on this special order exceeds:
Charlotte sells widgets that cost $50 each to purchase and prepare for sale. Annual sales are 10,000 widgets, carrying costs are 15% of inventory costs, and Charlotte incurs a cost of $25 each time an order is placed. (a) What is the EOQ? (b) What will be the total inventory costs if the EOQ amount is ordered? (c) Suppose that Charlotte's supplier decides to offer a 3% cash discount if products are ordered in increments of 1250. How many widgest should Charlotte order each time an order is placed to minimize total inventory costs?
RAF is currently makes all sales on credit and offers no cash discount. The firm is considering offering a 2% cash discount for payment within 15 days. The firm’s current average collection period is 60 days, sales are 40,000 units, selling price is $45 per unit, and variable cost per unit is $36. The firm expects that the change in credit terms will result in an increase in sales to 42,000 units, that 70% of the sales will take the discount, and that the average collection period will fall to 30 days. If the firm’s required rate of return on equal-risk investments is 25%, should the proposed discount be offered? (Note: Assume a 360-day year.)
Gardner Company currently makes all sales on credit and offers no cash discount. The firm is considering offering a 2 2% cash discount for payment within 15 days. The firm's current average collection period is 60 60 days, sales are 40 comma 000 40,000units, selling price is $ 45 45 per unit, and variable cost per unit is $ 36 36. The firm expects that the change in credit terms will result in an increase in sales to 42 comma 000 42,000 units, that 70 70% of the sales will take the discount, and that the average collection period will fall to 30 30 days. If the firm's required rate of return on equal-risk investments is 25 25%, should the proposed discount be offered? (Note: Assume a365-day year.)
Crystals’. currently makes all sales on credit and offers no cash discount. The firm is considering a 3% cash discount for payment within 10 days. The firm's current average collection period is 90 days, sales are 400 art pieces per year, selling price is R25 000 per art piece, variable cost per item is R18 750, and the average cost per item is R21 000. The firm expects that the change in credit terms will result in a minor increase in sales of 10 items per year that 75% of the sales will take the discount, and the average collection period will drop to 30 days. The firm's bad debt expense is expected to become negligible under the proposed plan. The bad debt expense is currently 0.5% of sales. The firm's required return on equal-risk investments is 20%. (Assume a 360-day year). What is the firms marginal profit contribution under the proposed plan? R22500 R40000 R62500 R100 000
Crystals’. currently makes all sales on credit and offers no cash discount. The firm is considering a 3% cash discount for payment within 10 days. The firm's current average collection period is 90 days, sales are 400 art pieces per year, selling price is R25 000 per art piece, variable cost per item is R18 750, and the average cost per item is R21 000. The firm expects that the change in credit terms will result in a minor increase in sales of 10 items per year that 75% of the sales will take the discount, and the average collection period will drop to 30 days. The firm's bad debt expense is expected to become negligible under the proposed plan. The bad debt expense is currently 0.5% of sales. The firm's required return on equal-risk investments is 20%. (Assume a 360-day year). QUESTION 4 What is the cost of marginal investment in accounts receivable under the proposed plan? R246 875 R276 500 R313 460 R368 314
Crystals’. currently makes all sales on credit and offers no cash discount. The firm is considering a 3% cash discount for payment within 10 days. The firm's current average collection period is 90 days, sales are 400 art pieces per year, selling price is R25 000 per art piece, variable cost per item is R18 750, and the average cost per item is R21 000. The firm expects that the change in credit terms will result in a minor increase in sales of 10 items per year that 75% of the sales will take the discount, and the average collection period will drop to 30 days. The firm's bad debt expense is expected to become negligible under the proposed plan. The bad debt expense is currently 0.5% of sales. The firm's required return on equal-risk investments is 20%. (Assume a 360-day year). QUESTION 5 What are the savings of marginal bad debts under the proposed plan? 1. R500 000 2.R50 000 3.R10 000 4. R5000
Charlotte sells widgets that cost $50 each to purchase and prepare for sale. Annual sales are 10,000 widgets, carrying cost are 15% of invenory costs and Charlotte incurs a cost of $25 each time an order is placed. Suppose that Charlottes' supplier decides to offer a 3% cash discount if products are ordered in increments of 1250. How many WIDGETS should Charlotte order each time an order is placed to minimize total inventory costs?
integrity inc. sells computor training packages to its business customers at a price of $91 the cost of production (in present value term) is $87, integrity sells its packages om term of net 30 and estimated that about 8% of all orders will be uncollectible an oder in for 25 units the interest rate is 0.6% per month given the above information Present value of revenue is? The expected profit from a sale is? If this is a one time Order and the sale will be made unless credit is expected the firm (should not) extend credit the break even probability of collection is ?% No suppose that if a customer pays the months bill it will place an identical order in each month indefinitely and can be safely assume to pose no risk of default in this case since the present value of the perpetuity of profit is? And the present value of sale is ? The credit should be extended the break even point probability of collection in the repeat- sales is
The Kidz Klothing store ordered a line of snowsuits at $60 each, less a trade discount of 8%. The selling price is marked up to allow for overhead expenses of 15% of the cost price, and profit of 25% of the cost price. a) What was the regular selling price of the snowsuits? b) If the snowsuits are sold for a reduced price of $59, what is the profit or loss perpair? c) What is the rate of markdown of the snowsuits?