Pharoah Hats is planning to sell 646 straw hats in April. Each hat requires ½ kilogram of straw and 14 hour of direct labour. Straw costs $0.10 per kilogram and employees of the company are paid $21 per hour. Pharoah has 80 kilograms of straw and 48 hats in beginning inventory and wants to have 50 kilograms of straw and 60 hats in ending inventory. How many units should Pharoah Hats produce in April? 598 706 658 646

Pharoah Hats is planning to sell 646 straw hats in April. Each hat requires ½ kilogram of straw and 14 hour of direct labour. Straw costs $0.10 per kilogram and employees of the company are paid $21 per hour. Pharoah has 80 kilograms of straw and 48 hats in beginning inventory and wants to have 50 kilograms of straw and 60 hats in ending inventory. How many units should Pharoah Hats produce in April? 598 706 658 646

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 2CE: Sterling Corporation has an EOQ of 5,000 units. The company uses an average of 500 units per day. An...

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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?
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