Sim-Jo-La Electronics sells a variety of electronic devices including a variety of WIFI SMART camera bulbs. The business began the second quarter (April to June) of 2020 with 15 (V380PRO) camera bulbs at a total cost of $108,750. The following transactions relating to the “V380PRO” camera bulbs were completed during the quarter. April 7 90 bulbs were purchased at a cost of $6,850 each. In addition, the business paid freight charges of $800 cash on each bulb to have the inventory shipped from the point of purchase to their warehouse. April 30 The sales for April were 75 bulbs which yielded total sales revenue of $803,250. (15 of these bulbs were sold on account to longstanding customers of the business) May 6 A new batch of 80 bulbs was purchased at a total cost of $654,800 May 9 Upon inspection of the bulbs purchased on May 6, five (5) of the units were found to be defective and were returned to the supplier. May 31 During the month 62 of the camera bulbs were sold at a price of $11,450 each. June 5 A customer, to whom 7 of the bulbs were sold during the first business day of May, returned 3 units of the merchandise, as they were of another make & model. June 14 Owing to an increased demand, a further 110 bulbs were purchased at a cost of $9,000 each; the supplier gave a 3% quantity discount on the purchase. June 30 116 bulbs were sold during June at a unit selling price of $12,250. June 30 An actual count of inventory was carried out at the close of business which revealed that there were 36 units of the V380PRO brand of merchandise in the store room. One of the managers of the business has indicated that his main objective is to cut back on his tax liability as much as possible and is of the view that the FIFO method would be best. Do you agree with him? Explain your answer clearly, with reference to the most popular methods of inventory Universal Enterprise sells a product that cost $450 per unit and has a monthly demand of 5,000 The annual holding cost per unit is calculated as 5% of the unit purchase price. It costs the business $75 to place a single order. Currently the business places 12 orders each year. What is the total stock administrative cost of Universal’s current inventory policy? Is this the entity’s cost minimizing solution for this product each year?

Sim-Jo-La Electronics sells a variety of electronic devices including a variety of WIFI SMART camera bulbs. The business began the second quarter (April to June) of 2020 with 15 (V380PRO) camera bulbs at a total cost of $108,750. The following transactions relating to the “V380PRO” camera bulbs were completed during the quarter. April 7 90 bulbs were purchased at a cost of $6,850 each. In addition, the business paid freight charges of $800 cash on each bulb to have the inventory shipped from the point of purchase to their warehouse. April 30 The sales for April were 75 bulbs which yielded total sales revenue of $803,250. (15 of these bulbs were sold on account to longstanding customers of the business) May 6 A new batch of 80 bulbs was purchased at a total cost of $654,800 May 9 Upon inspection of the bulbs purchased on May 6, five (5) of the units were found to be defective and were returned to the supplier. May 31 During the month 62 of the camera bulbs were sold at a price of $11,450 each. June 5 A customer, to whom 7 of the bulbs were sold during the first business day of May, returned 3 units of the merchandise, as they were of another make & model. June 14 Owing to an increased demand, a further 110 bulbs were purchased at a cost of $9,000 each; the supplier gave a 3% quantity discount on the purchase. June 30 116 bulbs were sold during June at a unit selling price of $12,250. June 30 An actual count of inventory was carried out at the close of business which revealed that there were 36 units of the V380PRO brand of merchandise in the store room. One of the managers of the business has indicated that his main objective is to cut back on his tax liability as much as possible and is of the view that the FIFO method would be best. Do you agree with him? Explain your answer clearly, with reference to the most popular methods of inventory Universal Enterprise sells a product that cost $450 per unit and has a monthly demand of 5,000 The annual holding cost per unit is calculated as 5% of the unit purchase price. It costs the business $75 to place a single order. Currently the business places 12 orders each year. What is the total stock administrative cost of Universal’s current inventory policy? Is this the entity’s cost minimizing solution for this product each year?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter11: Simulation Models

Section: Chapter Questions

Problem 69P: The Tinkan Company produces one-pound cans for the Canadian salmon industry. Each year the salmon...

See similar textbooks

Related questions

Question

Sim-Jo-La Electronics sells a variety of electronic devices including a variety of WIFI SMART camera bulbs. The business began the second quarter (April to June) of 2020 with 15 (V380PRO) camera bulbs at a total cost of $108,750. The following transactions relating to the “V380PRO” camera bulbs were completed during the quarter.

April 7	90 bulbs were purchased at a cost of $6,850 each. In addition, the business paid freight charges of $800 *cash* on each bulb to have the inventory shipped from the point of purchase to their warehouse.
April 30	The sales for April were 75 bulbs which yielded *total* sales revenue of $803,250. (15 of these bulbs were sold on account to longstanding customers of the business)
May 6	A new batch of 80 bulbs was purchased at a *total* cost of $654,800
May 9	Upon inspection of the bulbs purchased on May 6, five (5) of the units were found to be defective and were returned to the supplier.
May 31	During the month 62 of the camera bulbs were sold at a price of $11,450 each.
June 5	A customer, to whom 7 of the bulbs were sold during the *first* business day of May, returned 3 units of the merchandise, as they were of another make & model.
June 14	Owing to an increased demand, a further 110 bulbs were purchased at a cost of $9,000 each; the supplier gave a 3% quantity discount on the purchase.
June 30	116 bulbs were sold during June at a unit selling price of $12,250.
June 30	An actual count of inventory was carried out at the close of business which revealed that there were 36 units of the V380PRO brand of merchandise in the store room.

One of the managers of the business has indicated that his main objective is to cut back on his tax liability as much as possible and is of the view that the FIFO method would be best. Do you agree with him? Explain your answer clearly, with reference to the most popular methods of inventory

Universal Enterprise sells a product that cost $450 per unit and has a monthly demand of 5,000 The annual holding cost per unit is calculated as 5% of the unit purchase price. It costs the business $75 to place a single order. Currently the business places 12 orders each year.

What is the total stock administrative cost of Universal’s current inventory policy?
Is this the entity’s cost minimizing solution for this product each year?

Expert Solution

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here