CUSTOM COST ACCT 2521 SWP W/ ACCESS
17th Edition
ISBN: 9781323674116
Author: Pearson
Publisher: Pearson Custom Publishing
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Chapter 20, Problem 20.21E
Economic order quantity for retailer. Wonder Line (WL) operates a megastore featuring sports merchandise. It uses an EOQ decision model to make inventory decisions. It is now considering inventory decisions for its Los Angeles Galaxy soccer jerseys product line. This is a highly popular item. Data for 2017 are as follows:
| Expected annual demand for Galaxy jerseys | 9,000 |
| Ordering cost per purchase order | $250 |
| Carrying cost per year | $8 per jersey |
Each jersey costs WL $50 and sells for $100. The $8 carrying cost per jersey per year consists of the required return on investment of $5.00 (10% × $50 purchase price) plus $3.00 in relevant insurance, handling, and storage costs. The purchasing lead time is 5 days. WL is open 365 days a year.
- 1. Calculate the EOQ
Required
- 2. Calculate the number of orders that will be placed each year.
- 3. Calculate the reorder point.
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. Wonder Line (WL) operates a megastore featuring sports merchandise. It uses an EOQ decision model to make inventory decisions. It is now considering inventory decisions for its Los Angeles Galaxy soccer jerseys product line. This is a highly popular item. Data for 2017 are as follows:
Expected annual demand for Galaxy jerseys 9,000
Ordering cost per purchase order $250
Carrying cost per year $8 per jersey
Each jersey costs WL $50 and sells for $100. The $8 carrying cost per jersey per year consists of the required return on investment of $5.00 (10% * $50 purchase price) plus $3.00 in relevant insurance, handling, and storage costs. The purchasing lead time is 5 days. WL is open 365 days a year.
Q. Calculate the number of orders that will be placed each year
. Wonder Line (WL) operates a megastore featuring sports merchandise. It uses an EOQ decision model to make inventory decisions. It is now considering inventory decisions for its Los Angeles Galaxy soccer jerseys product line. This is a highly popular item. Data for 2017 are as follows:
Expected annual demand for Galaxy jerseys 9,000
Ordering cost per purchase order $250
Carrying cost per year $8 per jersey
Each jersey costs WL $50 and sells for $100. The $8 carrying cost per jersey per year consists of the required return on investment of $5.00 (10% * $50 purchase price) plus $3.00 in relevant insurance, handling, and storage costs. The purchasing lead time is 5 days. WL is open 365 days a year.
Q. Calculate the reorder point.
. Wonder Line (WL) operates a megastore featuring sports merchandise. It uses an EOQ decision model to make inventory decisions. It is now considering inventory decisions for its Los Angeles Galaxy soccer jerseys product line. This is a highly popular item. Data for 2017 are as follows:
Expected annual demand for Galaxy jerseys 9,000
Ordering cost per purchase order $250
Carrying cost per year $8 per jersey
Each jersey costs WL $50 and sells for $100. The $8 carrying cost per jersey per year consists of the required return on investment of $5.00 (10% * $50 purchase price) plus $3.00 in relevant insurance, handling, and storage costs. The purchasing lead time is 5 days. WL is open 365 days a year.
Q. Calculate the EOQ.
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,...
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