Answer: $34,470
Explanation:
a. Cost of goods sold for $2,550 units
The inventory sold will include the 945 units which cost $11 to produce.
It will get the rest from the 1,750 units which cost $15 to produce.
The remaining units are:
= 2,550 - 945
= 1,605 units
Total cost of goods sold:
= (945 * 11) + (1,605 * 15)
= 10,395 + 24,075
= $34,470
During the month of August, Ranson Productions applied overhead to jobs using an overhead rate of $0.60 per dollar of direct labor. Actual direct labor in August was 12,000 hours at $15.00 per hour, for a total of $180,000. Estimated overhead in August was $111,600.
Actual overhead was composed of the following items:
Indirect materials $ 16,400
Indirect labor 22,000
Utilities 24,500
Depreciation 38,700
Repair expense 13,500
Total $115,100
How much overhead was applied during August by Ranson Productions?
A. $115,100
B. $108,000
C. More information is needed to answer
D. $111,600
Answer:
B. $108,000
Explanation:
The computation of the overhead applied is as follows:
= Total actual direct labors cost × overhead rate
= $180,000 × 0.60
= $108,000
Hence, the overhead was applied during August by Ranson Productions is $108,000
We simply applied the above formula
According to a summary of the payroll of Mountain Streaming Co., $110,000 was subject to the 6.0% social security tax and the 1.5% Medicare tax. Also, $25,000 was subject to state and federal unemployment taxes.a. Calculate the employer's payroll taxes, using the following rates: state unemployment, 5.4%; federal unemployment, 0.8%.
Answer: $9,800
Explanation:
Payroll taxes = Social security + Medicare +State unemployment + Federal unemployment
= (110,000 * 6%) + (110,000 * 1.5%) + (25,000 * 5.4%) + (25,000 * 0.8%)
= 6,600 + 1,650 + 1,350 + 200
= $9,800
Unearned revenues are liabilities because:______.
A. the customer may someday return items purchased for a refund.
B. no cash has changed hands.
C. the company is transferring them to another period for tax reasons.
D. goods or services have been paid for, but not yet provided to the customer.
nearned revenue is recorded on a company's balance sheet as a liability. It is treated as a liability because the revenue has still not been earned and represents products or services owed to a customer. ... Both are balance sheet accounts, so the transaction does not immediately affect the income statement
Identify a new product that is based on an innovation in technology, and draw up a strategic technical plan for its development. Be sure to discuss the risk factors at each stage, and indicate how you would deal with each.
"An electric car" is a new product that depends upon technological innovation.
Its progress is guided by a strategic technology plan:
The production of new ideas:
The lithium-ion battery throughout the electric vehicle will provide the energy needed to run its engine. Installation of the battery would ensure it can do all the functions which the consumer would expect from a typical vehicle.The idea is evaluated:
The lithium-ion battery-powered electric car ought to be able to equal the speed of a gasoline or diesel-powered vehicle.Analysis of the business environment:
Due to its reduced mileage, such a car would be perfect for customers who are unable to pay the rising cost of oil for the vehicles. Thus, electric vehicles would've been ideal to clients with fundamental part from middle income to high class. Its car would attract a huge number of customers, as consumers are looking for vehicles that may help them save cash on gasoline prices.Development:
The fuel or diesel cylinder and batteries would be fitted in the car's bonnet. The rest of the car assembly process will proceed normally usual.Commercialization:
Customers will be able to buy cars through a countrywide dealer network.The car's battery plays a significant role in each step of the process. Whereas if a car's batteries run out while it was on the road, it could be recharged using another energy source. During a crisis, solar plates will absorb the sun and power a battery. As a result, the vehicle will keep running smoothly.Learn more:
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Sybil, age 40, is single and supports her dependent parents who live with her, as well as her grandfather who is in a nursing home. She has AGI of $80,000 and itemized deductions of $8,000. What is the taxable income?
Answer:
$61,650
Explanation:
Calculation to determine the taxable income
Adjusted Gross Income (AGI) $80,000
Deduct Standard deduction (head of household) ($18,350)
Taxable Income $61,650
($80,000-$18,350)
Therefore the vthe taxable income is $61,650
Labor data for making one gallon of finished product in Bing Company are as follows. (1) Price—hourly wage rate $16.70, payroll taxes $0.60, and fringe benefits $1.40. (2) Quantity—actual production time 1.60 hours, rest periods and cleanup 0.30 hours, and setup and downtime 0.20 hours. Compute the following. (Round answers to 2 decimal places, e.g. 1.25.)
(a) Standard direct labor rate per hour. $ ______
(b) Standard direct labor hours per gallon. hours
(c) Standard labor cost per gallon. $______
Answer:
a. Standard direct labor rate per hour = Hourly wage rate + Payroll taxes + Fringe benefits
Standard direct labor rate per hour = $16.70 + $0.60 + $1.40
Standard direct labor rate per hour = $18.70
b. Standard direct labor hours per gallon = Actual production time + Rest periods and cleanup + Setup and downtime
Standard direct labor hours per gallon = 1.60 hours + 0.30 hours + 0.20 hours
Standard direct labor hours per gallon = 2.1 hours
c. Standard labor cost per gallon = Standard direct hours per gallon * Standard direct labor rate per hour
Standard labor cost per gallon = 2.1 hours * $18.70
Standard labor cost per gallon = $39.27
Preparing a Budgeted Income Statement Oliver Company provided the following information for the coming year: Units produced and sold 160,000 Cost of goods sold per unit $6.30 Selling price $11 Variable selling and administrative expenses per unit $1.10 Fixed selling and administrative expenses $423,000 Tax rate 33 % Required: Prepare a budgeted income statement for Oliver Company for the coming year. Round all income statement amounts to the nearest dollar.
Answer and Explanation:
The preparation of the income statement is presented below:
Sales $1,760,000 (160,000 × $11)
Less: cost of goods sold ($1,008,000) (160,000 × $6.30)
Gross margin $752,000
Less: Variable selling and administrative expenses ($176,000) (160,000 × $1.10)
Less: Fixed selling and administrative expenses ($423,000)
Operating income $153,000
Less: INcome taxes ($50,490)
Net income $102,510
Opportunity cost is the amount of increase or decrease in cost that would result from the best available alternative to the proposed use of cash or its equivalent.
a) true
b) false
The given statement is "False". A further explanation is provided below.
Whenever a decision had been made above another, the profit losses are determined as an Opportunity cost. This same notion is merely beneficial as a refresher or recalls to consider all acceptable possibilities well before a person decides.Opportunity costs aren't just an equity account method and hence are not included throughout a company's financial statements. This is simply a notion of the financial assessment.
Thus the above is the right answer.
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Company J must choose between two alternate business expenditures. Expenditure 1 would require a $80,000 cash outlay and Expenditure 2 requires a $60,000 cash outlay.
a. Determine the marginal tax rate at which the after-tax cash flows from the two expenditures are equal assuming that Expenditure 1 is fully deductible and Expenditure 2 is nondeductible.
b. Determine the marginal tax rate at which the after-tax cash flows from the two expenditures are equal assuming that Expenditure 1 is 50% deductible and Expenditure 2 is nondeductible.
Answer:
A. 25%
B. 50%
C. 48000 after tax cash flow
Explanation:
a. lets assume marginal tax rate is X%
After tax cash flow of 80000 should equal to 60000$
$80000 - [$80000*X%] = 60000$
80000*X% = 80000-60000
80000*X% =20000
X = 20000/80000
= 25%
b.
$80000 - [$80000*50%*x%] = 60000$
40000*x%=20000
x%=50%
c.
$80000- [$80000*x] = 60000 - [60000*50%*x]
80000-60000 = [80000*x] - [30000*x]
20000 = 50000x
x=40%
check
80000-40% =48000 after tax cash flow
60000*50%
=60000- [60000*50%*40%]
=48000 after tax cash flow
Cucina Corp. signed a new installment note on January 1, 2018, and deposited the proceeds of $50,000 in its bank account. The note has a three-year term, compounds 5 percent interest annually, and requires an annual installment payment on December 31. Cucina Corp. has a December 31 year-end and adjusts its accounts only at year-end. Required:
Question Completion:
Required:
1.Use an online application, such as the loan calculator with annual payments at mycalculators.com, to generate an amortization schedule. Enter that information into an amortization schedule with the following headings: Year, Beginning Notes Payable, Interest Expense, Repaid Principal on Notes Payable, and Ending Notes Payable.
2.Prepare the journal entries on (a) January 1, 2018, and December 31 of (b) 2018, (c) 2019, and (d) 2020.
3.If Cucina Corp.’s year-end were March 31, rather than December 31, prepare the adjusting journal entry it would make for this note on March 31, 2018?
Answer:
Cucina Corp.
1. Annual Amortization Schedule
Year Beginning Interest Expense Repaid Principal Ending Notes
Notes Payable on Notes Payable Payable
1 $50,000.00 $2,140.23 $15,842.25 $34,157.68
2 $34,157.68 $1,329.68 $16,652.80 $17,504.84
3 $17,504.84 $477.71 $17,504.77 $0.00
2. (a) January 1, 2018
Debit Cash $50,000
Credit Installment Note Payable $50,000
To record the issuance of the installment note.
December 31 of
(b) 2018
Debit Interest Expense $2,140.23
Debit Installment Note Payable $15,842.25
Credit Cash $17,982.48
To record the first installment repayment, including interest.
(c) 2019
Debit Interest Expense $1,329.68
Debit Installment Note Payable $16,652.80
Credit Cash $17,982.48
To record the second installment repayment, including interest.
(d) 2020
Debit Interest Expense $477.71
Debit Installment Note Payable $17,504.77
Credit Cash $17,982.48
To record the third and final installment repayment, including interest.
3. (b) 2018
Debit Interest Expense $625
Credit Interest Payable $625
To accrue interest expense for the year ($50,000 * 5% * 3/12)
Explanation:
a) Data and Calculations:
Installment note payable obtained on January 1, 2018 = $50,000
Period of note payable = 3 years
Interest rate = 5% compounded annually
Annual interest payment = December 31
a face value of $450 million. The bonds pay interest each March 31 and September 30, beginning March 31, 2022. The effective interest rate established by the market was 8%. Assuming that Auerbach issued the bonds for $388,844,955, what interest expense would it recognize in its 2021 income statement
Answer:
$7,776,899
Explanation:
Calculation to determine what interest expense would it recognize in its 2021 income statement
Interest expense= $388,844,955 * 8% * (3 months/12 months)
Interest expense= $31,107,596.4 * 3/12
Interest expense= $7,776,899
Therefore the interest expense that would be recognize in its 2021 income statement is $7,776,899
Franklin is a research scientist at Insight Research Corporation (IRC). IRC has five research scientists, four assistants, one secretary, and one CEO. Franklin has developed ALS, a disease which binds him to a wheelchair. He is one of the greatest scientists in the world, and can still do his job. Franklin has requested that IRC accommodate his disability, making changes to the company restroom and widening the doors to the building. The changes would be relatively inexpensive, costing only $2,000. If Franklin sues under the Americans with Disabilities Act (ADA), what result
If Franklin sues under the Americans with Disabilities Act (ADA), Franklin will win and this will force IRC to accommodate his disability under this civil rights legislation.
The ADA law was passed to protect persons experiencing physical or mental impairment or disability against workplace discriminations.
While ALS is recognized as a progressive nervous system disease that surely affects Franklin's nerve cells in his brain and spinal cord, which has caused him to lose muscle control, he can still perform his duties as a research scientist at IRC.
Thus, Insight Research Corporation should accommodate Franklin and make the necessary changes, which have been determined to be relatively inexpensive to the company.
Thus, if IRC fails to accommodate Franklin and he sues the company in the court under ADA, he will prevail.
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Four aspects of empowered performance are understanding variation, deciding what to measure, working correctly with data, and using the resulting information appropriately.
a. True
b. False
Answer:
False
Explanation:
Let illustrate what you you know about materiality concept.
Answer:
rfb rgab rko
its a study meeting of girls i am also girl here we only study boy were not allowed because he disturb here we only study its safe meeting of girl here we only study
Not all the items in your office supply store are evenly distributed as far as demand is concerned, so you decide to forecast demand to help plan your stock. Past data for legal-sized yellow tablets for the month of August are. Week 1 280 Week 2 380 Week 3 580 Week 4 680 a. Using a three-week moving average, what would you forecast week 5 to be
Answer: 547 yellow tablets
Explanation:
The three-week moving average would use the average of the tablets in the last three weeks before the 5th weeks to calculate the average for the 5th week.
= (Week 2 + Week 3 + Week 4) / 3
= (380 + 580 + 680) / 3
= 1,640 / 3
= 546.7
= 547 yellow tablets
As the operations manager, you prefer to keep a constant workforce and production level, absorbing variations in demand through inventory excesses and shortages. Demand not met is carried over to the following month. Assuming you currently have 23 workers, what is the shortage cost for May
Answer:
Shortage cost for May is $71,000
Explanation:
The expected demand for the month of May is 5000 units.
Shortages for month are carried to next month.
Shortage cost is $10 per month.
(Working days per month x hrs/day x # of workers)
20 days * 8 hours * 23 workers = 3680
Jan : 3680 - 3500 = +180
Feb : 3680 + 180 - 4500 = -640
Mar : 3680 - 640 -6000 = -2980
Apr : 3680 - 2980 -6500 = 5780
May : 3680 - 5780 -5000 = 7100
An employee on the Internet-facing part of a company's website submits a 20-character phrase in a small textbox on a web form. The website returns a message back to the browser stating Error: Table 'advprofile' entry into column 'Inane' has exceeded number of allowed characters. Error saving database information. Of which of the following is this an example?
A. Resource exhaustion
B. Buffer overflow
C. Improperly configured account Improper error handing
Answer:
(B) Buffer Overflow
Explanation:
The description in the question is an example of a Buffer Overflow. This is also called a Buffer Overrun.
As the question depicts, the employee input more characters than was required in the text box. The text box was programmed to allow a more limited number of characters; maybe 15, 12, 18, etc but not up to 20.
A buffer is a storage space that holds data temporarily while it's being transported to a new space. An overrun on the buffer will occur if or when the inputed data exceeds the storage capacity of the buffer.
This overrun can cause the program to crash or access errors to develop; like the errors displayed in the question.
Copy equipment was acquired at the beginning of the year at a cost of $50,320 that has an estimated residual value of $4,600 and an estimated useful life of 5 years. It is estimated that the machine will output an estimated 1,143,000 copies. This year, 288,000 copies were made. a. Determine the depreciable cost. $fill in the blank 1 b. Determine the depreciation rate. Round your answer to two decimal places. $fill in the blank 2 per copy c. Determine the units-of-output depreciation for the year
Answer:
Annual depreciation= $11,520
Explanation:
Giving the following information:
Purchase price= $50,320
Salvage value= $4,600
Estimated copies= 1,143,000
First, we need to calculate the depreciable value:
Depreciable value= purchase price - salvage value
Depreciable value= 50,320 - 4,600
Depreciable value= $45,720
Now, the depreciable rate:
Depreciable rate= depreciable value / /useful life of production in copies
Depreciable rate= 45,720/1,143,000
Depreciable rate= $0.04 per copie
Finally, the annual depreciation:
Number of copies= 288,000
Annual depreciation= 0.04*288,000
Annual depreciation= $11,520
A journal entry for a payment for rent expense was posted as a debit to Salaries Expense and a credit to Cash. Which of the following statements correctly states the effect of the error on the trialâ balance?
A. The sum of the credits will equal the sum of the debits.
B. The sum of the debits will exceed the sum of the credits by .
C. The sum of the debits will exceed the sum of the credits by .
D. The sum of the credits will exceed the sum of the debits by .
Answer:
A). The sum of the credits will equal the sum of the debits.
Explanation:
journal entry journal entry can be regarded as record of the business transactions which is made in a accountingbooks of a business.
journal entry that is documented properly will contains correct date as well as amounts to be debited and description of the transaction, it contain amount to be credited as well as a unique reference number.Note that "There is equal amount of credit as well as debit in a journal entry"
Trial balance can be regarded as report that give lists of balances of all general ledger accounts in a firm at a particular point in time, there is compilation of all ledger balance into debit as well as credit account column totals. As rule in trial balance, the total of the debit balances as well as credit balances that is been extracted from the ledger must tally with each other.
Classification of cash flows [LO21-3, 21-4, 21-5, 21-6]
Listed below are several transactions that typically produce either an increase or a decrease in cash. Indicate by letter whether the cash effect of each transaction is reported on a statement of cash flows as an operating (O), investing (I), or financing (F) activity.
Transactions
1. Sale of Common Stock.
2. Sale of Land
3. Purchase of Treasury Stock
4. Merchandise Sales
5. Issuance of a long-term note payable
6. Purchase of merchandise
7. Repayment of note payable
8. Employee salaries
9. Sale of equipment at a gain.
10. Issuance of bonds
11. Acquisition of bonds of a another corporation
12. Payment of semiannual interest on bonds payable
13. Payment of a cash dividend
14. Purchase of a building
15. Collection of a nontrade note receivable (principal amount)
16. Loan to another firm.
17. Retirement of common stock.
18. Income taxes.
19. Issuance of short-term note payable
20. Sale of copyright
Answer and Explanation:
The classification is as follows:
1. This is the Financing activitiy
2. This is the investing activity
3. This is the Financing activity
4 This is an operating activity
5 This is the Financing activity
6 This is an operating activity
7 This is the Financing activity
8 This is an operating activity
9 This is an operating activity
10 This is the Financing activitiy
11 This is the investing activity
12 This is an operating activity
13 This is the Financing activitiy
14 This is the investing activity
15 This is the investing activity
16 This is the investing activity
17 This is the Financing activitiy
18 This is an operating activity
19 This is the Financing activitiy
20 This is the investing activity
Susan uses her office building as collateral to access credit and take out a loan from the bank. Because of the loan, she can hire three people to help her manage her business.
Answer:
property rights
Explanation:
edmentum/plato
Which of the following statements is false about the order in which management determines the sequencing of support department allocations under the sequential method of allocating support department costs to production departments?
a. Departments with more employees are allocated earlier.
b. Departments serving a large number of support departments are allocated earlier.
c. Departments with higher costs are allocated earlier.
d. Departments with more accurate cost drivers are allocated earlier.
Answer: A. Departments with more employees are allocated earlier.
Explanation:
In the sequential method, it should be noted that a company allocates the service costs one department at a time. Once the service department cost is allocated by the accountants, the department won't get any other costs from the other service departments.
The statement that is false about the order in which management determines the sequencing of support department allocations under the sequential method of allocating support department costs to production departments is that the departments with more employees are allocated earlier.
Under the sequential method, the department costs that are allocated earlier include having an accurate cost drivers, having a higher cost, or having a large number of support.
McKean Corporation authorized 500,000 shares of common stock in its articles of incorporation. On May 1, 2019, 100,000 shares were sold to the company's founders. However, on October 15, 2019, McKean repurchased 20,000 shares to settle a dispute among the founders. At this date, how many shares were issued and outstanding, respectively?
Answer:
100,000 shares and 80,000 shares
Explanation:
Calculation to determine how many shares were issued and outstanding, respectively
The shares that were issued will be 100,000 shares that were sold to the company's founders while the shares outstanding will be 80,000 shares Calculated as :
Shares outstanding=Shares issued -Shares repurchased
Shares outstanding=100,000 shares-80,000 shares
Shares outstanding =80,000 shares
Therefore the Number of shares that were issued and outstanding, respectively are:100,000 shares and 80,000 shares
To ensure that a borrower is not using short-term bank credit to finance a part of its permanent needs for funds, banks often require borrowers to clean up their short-term loans for a 30-45 day period during the year.
a. True
b. False
The furniture store offers you no-money-down on a new set of living room furniture. Further, you may pay for the furniture in three equal annual end-of-the-year payments of $1,000 each with the first payment to be made one year from today. If the discount rate is 6%, what is the present value of the furniture payments
Answer: $2,673
Explanation:
The amounts to be paid are constant so this is an annuity. The present value will therefore be the present value of an annuity.
Present value of annuity = Annuity * Present value interest factor of annuity, 3 periods, 6%
= 1,000 * 2.6730
= $2,673
Roddie is 30 years old. He was demoted from his job as a manager at Big Trucks, a company with 10,000 employees. He was replaced by Bambi, a 45-year-old. Roddie was told that he was a little too young for management. Under the Age Discrimination in Employment Act (ADEA), what are Roddie's options
The option available for Roddie would be "Roddie has no options under ADEA."
To understand this, we need to go through the terms of 'Age Discrimination Policy in Employment Act;'
This Act covers the cases of employees or workers aging either 40 or above who have suffered age-based discrimination.The people aging under 40 are not covered under this act and hence, the benefits can not be reaped by them in any situation. This law doesn't allow the process of giving preference to an older employee over the younger to be considered illegal.Hence, Roddie has no available options under ADEA as he is below 40(in fact only 30 years old) and he cannot claim under ADEA for justice.
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ADP reports the following income statement.
AUTOMATIC DATA PROCESSING INC.
Statement of Consolidated Earnings
For Year Ended June 30, 2019, $ millions
Total revenues $14,175.2
Operating expenses 7,145.9
Systems development and programming costs 636.3
Depreciation and amortization 304.4
Total cost of revenues 8,086.6
Selling, general, and administrative expenses 3,064.2
Interest expense 129.9
Total expenses 11,280.7
Other income expense, net 111.1
Earnings before income taxes 3,005.6
Provision for income taxes 712.8
Net earnings $ 2,292.8
Forecast ADP’s 2020 income statement assuming the following income statement relations. All percentages (other than total revenue growth and provision for income taxes) are based on historic percent of total revenues.
Total revenues growth 13%
Depreciation and amortization $460.5 million
Interest expense No change
Other (income) expense, net No change
Income tax rate 25%
Round your answers to one decimal place.
Answer:
Forecast of 2020 net earnings = $299.2 million.
Explanation:
Note:
a. See part a of the attached excel file for the calculations of the Historic Percent of Total Revenue.
b. See part b of the attached excel file for the Forecast of ADP’s 2020 income statement.
From part b of the attached excel file, we have:
Forecast of 2020 net earnings = $299.2 million.
The papilla supplies nourishment to the
Answer:
Papilla: Cells filled with capillaries that supply nourishment to the cells around it.
Typical Request and Response Messages
The purpose of many business messages is to make a request or to reply to previously received communication. Familiarize yourself with the organization of these messages so you can communicate your purpose and achieve a positive outcome.
Read the scenario:
The office manager asks you for advice on how to structure a request message with numerous questions.
What advice would you give?
A. Give an approximate date for the deadline in the body.
B. Place the deadline in the opening.
C. Set an end date to take action in the closing.
Read the following request message:
To: Customer Support
From: Helen Martin
Subject: Warranty Information for Netbook Computer
Dear Customer Service,
I need this information by noon tomorrow at the latest. My team has an important presentation to give, and my netbook crashed while we were working on the presentation. I can’t find the warranty information anywhere. So I have a few questions.
Where is my warranty information? How long does it normally take to repair these machines? Do I have to mail the netbook to you, or can I bring it to your local repair shop?
Will you please answer these questions in a timely manner? Thank you in advance for your help.
Regards,
Helen Martin
1. Where do I find my warranty information?
Reason A: 2. How long does the average netbook repair take?
3. Do I need to mail in my netbook for repairs or bring it to your local repair shop?
Revision B: Where is my warranty information? How long does the average repair take? Do I have to mail in my netbook?
Revision C:
Where do I find the information?
How long does it take?
Can I take it to my local shop?
Which of the preceding revisions is the best revision for the body of this message?
A. Revision B
B. Revision C
C. Revision A
In addition to making requests, you will have to respond to requests in the business world.
Complete the following sentence with the dropdown menu.
Direct response messages might _______?
A. include long, flowery descriptions
B. use the "me" view
C. supply explanations and additional information
Many businesses use social media to communicate with customers. In order to make the most of social media, you should learn how to respond to various types of customer comments.
Read the scenario, and then answer the question.
You manage the social media presence of a company that manufactures travel apparel and gear. A customer posts an angry comment about a suitcase that failed to function properly after its first use. This is not the first complaint the product has received.
How should you respond to the customer?
A. Acknowledge the problem, and let the customer know that the company is working to rectify the situation.
B. Document and delete the comment. You don’t want news of the flawed product to spread.
C. Let the comment stand. No response is necessary.
Answer:
B. Place the deadline in the opening.
A. Revision B
B. Use the "me" view
A. Acknowledge the problem, and let the customer know that the company is working to rectify the situation.
Explanation:
Customer service is the most difficult task. If a customer is angry because of mis functioning of a product then concerns should be heard with patience and the company staff should try to resolve these issues and satisfy customer properly. One angry customer may take away 100 potential customers of a business.
Maverick law office currently orders ink refills 120 units at a time. The firm estimates that carrying cost is 40% of the $10 unit cost and that annual demand is about 480 units per year. The assumptions of the basic EOQ model are thought to apply. For what value of ordering cost would its current action (order quantity) be optimal
Answer:
Economic order quantity (EOQ)= 49 units
Explanation:
Giving the following information:
Demand= 480 units per year
Order cost= $10
Holding cost= 10*0.4= $4
Economic order quantity (EOQ) is the ideal order quantity a company should purchase to minimize inventory costs such as holding costs, shortage costs, and order costs.
Economic order quantity (EOQ)= √[(2*D*S)/H]
D= Demand in units
S= Order cost
H= Holding cost
Economic order quantity (EOQ)= √[(2*480*10) / 4]
Economic order quantity (EOQ)= √(2,400)
Economic order quantity (EOQ)= 49 units
