CUSTOM COST ACCT 2521 SWP W/ ACCESS
17th Edition
ISBN: 9781323674116
Author: Pearson
Publisher: Pearson Custom Publishing
expand_more
expand_more
format_list_bulleted
Textbook Question
Chapter 20, Problem 20.19MCQ
Lyle Co. has only one product line. For that line, the reorder point is 500 units, the lead time for production is three weeks, and the sales volume is estimated at 50 units per week. Lyle has established which of the following amounts as its safety stock?
- a. 150
- b. 350
- c. 500
- d. 650
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Lyle Co. has only one product line. For that line, the reorder point is 500 units, the lead time for production is three weeks,and the sales volume is estimated at 50 units per week. Lyle has established which of the following amounts as its safety stock?a. 150b. 350c. 500d. 650
Malburn Construction Ltd. Manufactures and distributes window frames. The company uses 600,000metal strips in producing the frames for the year. Each strip cost $15, the storage cost is 10% of the costprice and $180 is required to make an order.(i). Find the order size Malburn Construction needs to minimize its inventory costs.
Calculate for the company:(ii). the number of orders placed per year.
(iii).the length of the stock cycle in days.
(iv). the annual ordering cost
(v). the annual holding cost
(vi). the total annual cost
ABC operates 250 days in a year and sells an average of 500 units each day. On better days, sales may reach 800 units. The supplier delivers the inventory within 3 to 6 days after receiving the purchase orders from ABC but the average time is 4 days. Assuming normal operations, what would the expected minimum inventory level be for ABC?
Chapter 20 Solutions
CUSTOM COST ACCT 2521 SWP W/ ACCESS
Ch. 20 - Why do better decisions regarding the purchasing...Ch. 20 - Name six cost categories that are important in...Ch. 20 - What assumptions are made when using the simplest...Ch. 20 - Give examples of costs included in annual carrying...Ch. 20 - Give three examples of opportunity costs that...Ch. 20 - What are the steps in computing the cost of a...Ch. 20 - Why might goal-congruence issues arise when...Ch. 20 - JIT purchasing has many benefits but also some...Ch. 20 - What are three factors causing reductions in the...Ch. 20 - You should always choose the supplier who offers...
Ch. 20 - Prob. 20.11QCh. 20 - What are the main features of JIT production, and...Ch. 20 - Distinguish inventory-costing systems using...Ch. 20 - Describe three different versions of backflush...Ch. 20 - Discuss the differences between lean accounting...Ch. 20 - The order size associated with the...Ch. 20 - Prob. 20.17MCQCh. 20 - Prob. 20.18MCQCh. 20 - Lyle Co. has only one product line. For that line,...Ch. 20 - Just-in-time inventory assumes all of the...Ch. 20 - Economic order quantity for retailer. Wonder Line...Ch. 20 - Economic order quantity, effect of parameter...Ch. 20 - EOQ for a retailer. The Fabric World sells fabrics...Ch. 20 - EOQ for manufacturer. Sk8 Company produces...Ch. 20 - Sensitivity of EOQ to changes in relevant ordering...Ch. 20 - JIT production, relevant benefits, relevant costs....Ch. 20 - Backflush costing and JIT production. Grand...Ch. 20 - Backflush costing, two trigger points, materials...Ch. 20 - Backflush costing, two trigger points, completion...Ch. 20 - Prob. 20.30PCh. 20 - Prob. 20.31PCh. 20 - Prob. 20.32PCh. 20 - Prob. 20.33PCh. 20 - JIT purchasing, relevant benefits, relevant costs....Ch. 20 - Supply-chain effects on total relevant inventory...Ch. 20 - Supply-chain effects on total relevant inventory...Ch. 20 - Backflush costing and JIT production. The Acton...Ch. 20 - Backflush, two trigger points, materials purchase...Ch. 20 - Backflush, two trigger points, completion of...Ch. 20 - Lean accounting. Reliable Security Devices (RSD)...Ch. 20 - JIT production, relevant benefits, relevant costs,...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- 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 annual ordering cost. 2. Compute the annual carrying cost. 3. Compute the cost of Ottiss current inventory policy. Is this the minimum cost? Why or why not?arrow_forwardPietro expects to produce 50,000 units and sell 49,300 units. Beginning inventory of finished goods is 42,500, and ending inventory of finished goods is expected to be 34,000. Required: 1. Prepare a statement of cost of goods sold in good form. 2. What if the beginning inventory of finished goods decreased by 5,000? What would be the effect on the cost of goods sold?arrow_forwardClick the Chart sheet tab. On the screen is a column chart showing ending inventory costs. During a deflationary period, which bar (A, B, or C) represents FIFO costing, which represents LIFO costing, and which represents weighted average? Explain your reasoning. On January 4 following year-end, Rio Enterprises received a shipment of 60 units of product costing 580 each. These units had been ordered by Del in December and had been shipped to him on December 27. They were shipped FOB shipping point. Revise the FIFOLIFO3 worksheet to include this shipment. Preview the printout to make sure that the worksheet will print neatly on one page, and then print the worksheet. Save the completed file as FIFOLIFOT. Using the FIFOLIFO3 file, prepare a 3-D bar (stacked) chart showing the cost of goods sold and ending inventory under each of the four inventory cost flow assumptions. No Chart Data Table is needed. Use the values in the Calculations Section of the worksheet for your chart. Enter your name somewhere on the chart. Save the file again as FIFOLIFO3. Print the chart.arrow_forward
- 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?arrow_forwardFor each of the following independent situations, calculate the missing values: 1. The Belen plant purchased 78,300 of direct materials during June. Beginning direct materials inventory was 2,500, and direct materials used in production were 73,500. What is ending direct materials inventory? 2. Forster Company produced 14,000 units at an average cost of 5.90 each. The beginning inventory of finished goods was 3,422. (The average unit cost was 5.90.) Forster sold 14,120 units. How many units remain in ending finished goods inventory? 3. Beginning work in process (WIP) was 116,000, and ending WIP was 117,300. If total manufacturing costs were 349,000, what was the cost of goods manufactured? 4. If the conversion cost is 84 per unit, the prime cost is 55, and the manufacturing cost per unit is 105, what is the direct materials cost per unit? 5. Total manufacturing costs for August were 412,000. Prime cost was 64,000, and beginning WIP was 76,000. The cost of goods manufactured was 434,000. Calculate the cost of overhead for August and the cost of ending WIP.arrow_forwardCrawford Steel Corp. buys inventory of 40,000 units annually. The purchase price per unit is $3.00 and delivery time takes 2 weeks after the order is placed. The ordering cost is $40 per order. The storing and insurance cost of the inventory per quarter is 20 percent of the purchase price. Based on the sales records, it normally maintains its safety stock of 4,500 units. Order should be placed in 100 units and 50 weeks is in a year. Calculate: the economic order quantity. the total cost of holding inventory. the inventory level should reorder be made. the number of orders that will be placed annually.arrow_forward
- The following information is derived from Fun & Game LLC financial statements. Annual usage of material is 1,000 units, average stock level is 1,400 units, re-order period is 6 – 10 weeks, minimum level is 800 units and normal rate of consumption is 150 units per week. Then calculate the re-order quantity. a. 800 units b. 1,200 units c. 1,000 units d. 400 unitsarrow_forwardXYZ Inc. needs 400 kgs of a material per month. It costs OMR 100 to make and receive an orderand it takes 10 workdays to receive it. The annual holding cost is 15% of purchase priceThe price OMR 2 per kg. The company is operating 6 workdays per week in a 52-week year. At what level of inventory in should the company be placing orders? Round-up to the nearest integer : a. 277 b. 154 C. 247 d. None is correct E. 188arrow_forwardCherboneau Novelties produces drink coasters (among many other products). During the current year (year 0), the company sold 525,000 units (packages of 6 coasters). In the coming year (year 1), the company expects to sell 550,000 units, and, in year 2, it expects to sell 684,000 units. The target ending finished goods inventory for each month is equal to the next month's sales. However, because of production issues, the ending inventory in the current year (year 0) is expected to be only 14,500 units. Each unit requires 0.5 pound of cork. At the end of the current year (year 0), management expects to have 20,000 pounds of cork in inventory. Management has set a target to have cork on hand equal to one half of next month’s sales requirements during the coming year (year 1). Sales and production take place evenly throughout the year. Required: Compute the total targeted production of the finished coaster for the coming year. Compute the required amount of cork to be purchased for…arrow_forward
- In its first year of operation, the Clayton Publishing Company sells 52,000 units and has 1,700 units in stock at year end. The cost of goods sold are $3,100,000. What are the total manufacturing costs for the year if the average unit cost is $8.50? $3,114,450 $3,100,000 $3,085,550 4. $14,450arrow_forwardCherboneau Novelties produces drink coasters (among many other products). During the current year (year 0), the company sold 530,000 units (packages of 6 coasters). In the coming year (year 1), the company expects to sell 560,000 units, and, in year 2, it expects to sell 744,000 units. The target ending finished goods inventory for each month is equal to the next month's sales. However, because of production issues, the ending inventory in the current year is expected to be only 17,000 units. Each unit requires 0.5 pound of cork. At the end of the current year, management expects to have 21,250 pounds of cork in inventory. Management has set a target to have cork on hand equal to one half of next month's sales requirements. Sales and production take place evenly throughout the year. Required: 8. Compute the total targeted production of the finished coaster for the coming year. b. Compute the required amount of cork to be purchased for the coming year. a. Total targeted production in…arrow_forwardCherboneau Novelties produces drink coasters (among many other products). During the current year (year 0), the company sold 522,000 units (packages of 6 coasters). In the coming year (year 1), the company expects to sell 544,000 units, and, in year 2, it expects to sell 648,000 units. The target ending finished goods inventory for each month is equal to the next month's sales. However, because of production issues, the ending inventory in the current year is expected to be only 13,000 units. Each unit requires 0.5 pound of cork. At the end of the current year, management expects to have 19,250 pounds of cork in inventory. Management has set a target to have cork on hand equal to one half of next month’s sales requirements. Sales and production take place evenly throughout the year. Required: a. Compute the total targeted production of the finished coaster for the coming year. b. Compute the required amount of cork to be purchased for the coming year. (540,000 units for a is incorrect…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage LearningEBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENTExcel Applications for Accounting PrinciplesAccountingISBN:9781111581565Author:Gaylord N. SmithPublisher:Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Excel Applications for Accounting Principles
Accounting
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Cengage Learning
Inventory management; Author: The Finance Storyteller;https://www.youtube.com/watch?v=DZhHSR4_9B4;License: Standard Youtube License