Q5./Suppose that the demand for a product is 10000 per year and the items are withdrawn uniformly. The order cost is 1000$ and the inventory holding cost 65 per item per year. If shortages cost 5$ per item per year. Find: 1. The economic order quantity 2. Maximum inventory (I Max) 3. The number of ordering during the year (Order frequency) 4. The interval between two orders

Q5./Suppose that the demand for a product is 10000 per year and the items are withdrawn uniformly. The order cost is 1000$ and the inventory holding cost 65 per item per year. If shortages cost 5$ per item per year. Find: 1. The economic order quantity 2. Maximum inventory (I Max) 3. The number of ordering during the year (Order frequency) 4. The interval between two orders

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter10: Inventory

Section: Chapter Questions

Problem 1PA: When prices are rising (inflation), which costing method would produce the highest value for gross...

See similar textbooks

Similar questions

When prices are rising (inflation), which costing method would produce the highest value for gross margin? Choose between first-in, first-out (FIFO); last-in, first-out (LIFO); and weighted average (AVG). Evansville Company had the following transactions for the month. Calculate the gross margin for each of the following cost allocation methods, assuming A62 sold just one unit of these goods for $10,000. Provide your calculations. A. first-in, first-out (FIFO) B. last-in, first-out (LIFO) C. weighted average (AVG)
1. For next year, if the expected sales quantity is 5,000 units, what is the number of units needed to be produced? 2,800 5,000 3,900 6,100 2. Based on the visualization, what is the percentage required for the ending inventory? 5% of the expected sales quantity 20% of the expected sales quantity 10% of the expected sales quantity 15% of the expected sales quantity 3.How does the company calculate the total quantity required for the period? It is “Expected sales quantity” minus “Quantity needed to be produced” It is “Expected sales quantity” It is “Expected sales quantity” plus “Quantity required for the ending inventory” minus “Beginning inventory” It is “Expected sales quantity” plus “Quantity required for the ending inventory”.
A company stocks an item that is consumed at the rate of 35 units each day. Every time an order is placed for new supply, $ 105 must be paid. A unit inventory held in stock will cost $ 0.15 d) What is the total cost if the order quantity is 205 more than EOQ? e) What is the optimum number of orders (rounded to the closest integer) that the company has to place each year? Assume that the company has a standing policy of not allowing shortages in demand.
Given the following informations annual sales in units 30,000 cost of placing an order $60,00 per unit carrying costs $ 1.50 Existing units of safety stock 300 a what is the EOQ? b. what is the average inventory based on the EOQ and the existing safety stock c. what is the maximum level of inventory? d. how many orders are placed each year?
The annual inventory requirement at the C &E Enterprises is P2,500 units. Each inventory item has a value of P5,000. Ordering cost is P50.00. Carrying cost is 20% of average inventory. Find the following: a. Optimal number of order per year b. Economic order quantity c. Annual carrying cost d. Annual Ordering cost e. Total annual inventory cost
Given: Peter Piper has projected sales of 72,000 pipes this year, ordering cost of P6 per order, and carrying costs of P2.40 per pipe. With the given data, can you give me the solution on how to get: -What is the economic ordering quantity? -Total inventory cost at EOQ -How many orders will be placed during the year?-What will the average inventory be? Thank you in advance.
1. If last year's sales were $906,050 and a store was planning an increase in sales of 3.75% and a markdown percent of 18.25%, what is the planned markdown in dollars? (Present your answer rounded to the dollar with a dollar sign and comma separator (i.e. $109,455).) 2. Using the following data, calculate the planned April purchases at cost. (Present your answer rounded to the dollar with a dollar sign and comma separator (i.e. $109,455).) Sales $220,000 BOM Stock for April $380,000 BOM Stock for May $240,000 Markup 51% Markdowns 2.3%
2. A local retailer anticipates an annual demand 12000 units of a product. The retailer allows shortages for that product, and these shortages are backordered at a rate of OMR per unit backordered. The cost of ordering is 200 OMR whereas, the annual holding cost is 1 OMR per unit. The retailer operates 300 days per year. What is the optimal maximum inventory level ? Round-up to the nearest integer a. 1789 b. None is correct c. 1960 d. 1898 e. 1987
The annual inventory requirement at the C &E Enterprises is P2,500 units. Each inventory item has a value of P5,000. Ordering cost is P50.00. Carrying cost is 20% of average inventory. a. Optimal number of order per year b. Economic order quantity c. Annual carrying cost d. Annual Ordering cost e. Total annual inventory cost
10. XYZ has developed the following data from its Material A Safety stock Average (normally) daily use 280 240 180 1.000 200 Maximum daily use Minimum daily use EOQ Cost of placing an order Working days per year P20 250 days Lead time 6 days What is the average inventory?
If the annual cost of goods sold is $30,000,000 and the average inventory is$5,000,000,a. What is the inventory turns ratio?b. What would be the reduction in average inventory if, through better materialsmanagement, inventory turns were increased to 10 times per year?c. If the cost of carrying inventory is 25% of the average inventory, what is the annual savings?
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