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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?This year, Lambert Company will ship 1,500,000 pounds of goods to customers at a cost of $1,200,000. If a customer orders 10,000 pounds and produces $200,000 of revenue( total revenue is $20million), The amount of shipping cost assigned to the customer by using ABC would be a. Unable to be determined. b.$8,000($0.80per pound shipped) c.$24, 000(2% of the shipping cost) d. $12,000(1% of the shipping cost) e. None of theseThe following information relates to a company selling 25000 pairs of shoes for a year; sellingprice per unit- GH¢40, purchase cost per unit- GH¢25, fixed cost is made up of salariesGH¢100000, advertising- GH¢40000 and other fixed cost- GH¢100000. If a selling commissionof GH¢2 per pair was introduced, how many pairs should be sold to earn an after-tax profit ofGH¢12000 assuming a tax rate of 40%? A. 30000units B. 20000units C. 15000units D. 25000units Consider the information below for a company whose products goes through two processes;material cost of GH¢100000 for a quantity of 10000kg, labour cost- GH¢50000 and overheadcost as twice the cost of labour. The company expected an output of 9500kg from process 1 buteventually obtained 9400kg. The actual output of 9400kg shows that A. There is an abnormal gain of 100kg B. There is an abnormal loss of GH¢2632 C. Cannot determine without further details D. A normal loss
- A microbrewery purchases malt for production. The supplier charges $35 for delivery (no matter how much is delivered) and $1.20 per gallon. The annual holding cost is 35% of the price per gallon. Usage is 250 gallons/week. a) If the order quantity is 1000 gallons, what is the average inventory? b) If the order quantity is 1500 gallons, how many orders are placed each year? c) What is the EOQ quantity? d) If the order quantity is 2500 gallons, what is the sum of the ordering and holding costs PER GALLON? e) If orders are for the EOQ amount, what is the annual cost of the inventory system as a percentage of the annual purchase cost? f)If orders must be in integer multiples of 1000 gallons, how much should be ordered to minimize ordering and holding costs PER GALLON? g) A 3% purchase price discount is given if orders are for 8000 gallons or more. What would total annual costs (purchasing, ordering, and holding) be using this discount?Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $20 per unit. Variable expenses are $8 per unit, and fixed expenses total $180,000 per year. Answer the following independent questions: (Pls do only question4,5 ) What is the product's CM ratio? Use the CM ratio to determine the break-even point in dollar sales. Due to an increase in demand, the company estimates that sales will increase by $75,000 during the next year. By how much should net operating income increase (or net loss decrease) assuming that fixed expenses do not change? Refer to the original data. Assume that the company sold 18,000 units last year. The sales manager is convinced that a 10% reduction in the selling price, combined with a $30,000 increase in advertising, would increase annual unit sales by one-third. Prepare two contribution format income statements, one showing the results of last year's operations and one showing the results of operations if these changes are made. Would…DG Company is the exclusive importer of spare parts of automobile products in Ghana. The parts sell for GHS40 per unit and has variable cost of GHS28 per unit. The company’s fixed expenses are GHS180,000 per year. The company plans to sell 16,000 units of the product in 2016. Required: (i) What is the break-even point in units and Ghana cedis? (ii) What sales level in units and in sales value is required to earn an annual profit of GHS60,000? (iii) Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by GHS4 per unit. What is the company’s new break-even point in units and sales value? (iv) Explain the effects of the changes in variable expenses on the break-even of the company.
- ABC Office Furniture sells its primary product, an office chair, at R150 per unit. Total credit sales for the previous financial year were 4 000 units. The variable cost to manufacture one chair is R60 and the total fixed costs for the year are R80 000. The entity’s credit terms are 2/10 net 45 and it is considering tightening its credit standards to 3/7 net 30. This is expected to result in a 5% decrease in sales, but bad debt is expected to decrease from 2% of credit sales to 1%. The average collection period is expected to decrease from the current 45 days to 30 days. In the past, 20% of debtors accepted the discount. This percentage is not expected to change. The entity’s cost of capital is 14%. Assume 365 days per year. To calculate the effect of the tightening of credit standards, the entity needs to calculate the following: ■ the profit loss or gain from a decrease or an increase in sales ■ the cost of the marginal investment in accounts receivable ■ the cost of marginal bad…One of the products that Justine Corporation sells is “Extra Soft” floor mats. Justine’s ordering costs related to the mat is P12.50 per order. The cost of carrying one mat for one year is P16.00. Justine sells 40, 000 of these mats evenly throughout the year. 1. If, instead of following the EOQ, the company decided to place an order of 200 units per order, how much will be the total inventory cost?Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $20 per unit. Variable expenses are $8 per unit, and fixed expenses total $180,000 per year. Answer the following independent questions: (Do only question 4,5) What is the product's CM ratio? Use the CM ratio to determine the break-even point in dollar sales. Due to an increase in demand, the company estimates that sales will increase by $75,000 during the next year. By how much should net operating income increase (or net loss decrease) assuming that fixed expenses do not change? Refer to the original data. Assume that the company sold 18,000 units last year. The sales manager is convinced that a 10% reduction in the selling price, combined with a $30,000 increase in advertising, would increase annual unit sales by one-third. Prepare two contribution format income statements, one showing the results of last year's operations and one showing the results of operations if these changes are made. Would you…
- Appliance Store realizes a mark-up of PhP3,450 in selling TV sets. If its items are sold at a mark-up of 40% of the selling price, D. If overhead expenses are at 27% of the cost, what is the break-even price of the TV set? E. If the TV set is sold at PhP7,500, how much profit or loss is incurred by Appliance Store? pls. show all the solutionsLindon Company is the exclusive distributor for an automotive product that sells for $46.00 per unit and has a CM ratio of 30%. The company’s fixed expenses are $303,600 per year. The company plans to sell 25,800 units this year. Required: 1. What is the break-even point in unit sales and in dollar sales? 2. What amount of unit sales and dollar sales is required to attain a target profit of $165,600 per year? 3. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $4.60 per unit. What is the company’s new break-even point in unit sales and in dollar sales? What dollar sales is required to attain a target profit of $165,600?The Valdez Mug Company manufactures plastic mugs that sell to wholesalers for P4.00each. Variable and fixed costs are as follows: Valdez Mug produced and sold 10,000 cups during April 2019. There were no beginning or ending inventories.Required:a. Determine Valdez Mug's monthly break-even point in units.b. If monthly sales increase by 500 cups, what will be the change in monthly profits?c. If Valdez Mug is now subject to an income tax of 40 percent, what dollar sales volume is required to earn a monthly after-tax net income of P12,000?
