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Problem 13-3 A large bakery buys flour in 25-pound bags. The bakery uses an average of 4,600 bags a year. Preparing an order and receiving a shipment of flour involves a cost of $10 per order. Annual carrying costs are $75 per bag. Determine the economic order quantity. (Do not round intermediate calculations. Round your final answer to the nearest whole number.) What is the average number of bags on hand?(Round your answer to the nearest whole number.) =18 How many orders per year will there be? (Round your final answer to the nearest whole number.) Compute the total cost of ordering and carrying flour. (Round your answer to 2 decimal places. Omit the \"$\" sign in your response.) If holding costs were to increase by $9 per year, how much would that affect the minimum total annual cost? (Round intermediate order qty to nearest whole number and round your answer to 2 decimal places. Omit the \"$\" sign in your response.) A large bakery buys flour in 25-pound bags. The bakery uses an average of 4,600 bags a year. Preparing an order and receiving a shipment of flour involves a cost of $10 per order. Annual carrying costs are $75 per bag. Solution -- D = Demand= 4600 bags/year C = Inventory Carrying cost or holding cost = 75 O = Ordering cost= $10 per order sqrt = square root (a) Economic Order Quantity (EOQ) = Q = sqrt(2DO/C) = sqrt(2*4600*10/75) = 35.024 = 36 bags (b) Average number of bags in hand = average inventory = Q/2 = 36/2 = 18 bags c) Orders per year = D/Q = 4600/35.024 = 131.34 = 132 orders per year (d) Total cost (TC) = product cost (PC) + Inventory Cost (IC) + Ordering cost (OC) TC = PC + IC + OC PC = unit price * demand = as the unit price is not given, this part cannot be included in TC hence TC = IC + OC IC = Average Inventory * Carrying cost = Q/2 * C = 36/2 * 75 = 1350 OC = D/Q * O = 4600/35.024 * 10 = 1320 TC = 1350 + 1320 = $2670 e) C = $75+$9 = $84 (the new Inventory carrying cost) IC = 36/2 * 84 = 1512 TC = 1512 + 1320 = $2862 2862 – 2670 = 192 The cost would rise by $192 --.

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Trident university acc 201 leesa marteen

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Module 4 - SLPMANAGERIAL ACCOUNTING - VARIABLE COSTING.docxmoirarandell

- Problem 5-4A Computing merchandising amounts and formatting income statements LO C2, P4 [The following information applies to the questions displayed below.] On August 31, 2012, merchandise inventory was $28,245. Supplementary records of merchandising activities for the year ended August 31, 2013, reveal the following itemized costs. References Section BreakProblem 5-4A Computing merchandising amounts and formatting income statements LO C2, P4 2. value: 0.80 points Required information Problem 5-4A Part 1 References eBook & Resources WorksheetDifficulty: MediumLearning Objective: 05-P4 Define and prepare multiple-step and single-step income statements. Problem 5-4A Part 1Learning Objective: 05-C2 Identify and explain the inventory asset and cost flows of a merchandising company. Check my work 3. value: 0.80 points Required information Problem 5-4A Part 2 References eBook & Resources WorksheetDifficulty: MediumLearning Objective: 05-P4 Define and prepare multiple-step and single-step income statements. Problem 5-4A Part 2Learning Objective: 05-C2 Identify and explain the inventory asset and cost flows of a merchandising company. Check my work
- 4. value: 0.80 points Required information Problem 5-4A Part 3 Prepare a multiple-step income statement that includes separate categories for selling expenses and for general and administrative expenses. rev: 01_02_2014_QC_43145 References eBook & Resources WorksheetDifficulty: MediumLearning Objective: 05-P4 Define and prepare multiple-step and single-step income statements. Problem 5-4A Part 3Learning Objective: 05-C2 Identify and explain the inventory asset and cost flows of a merchandising company. Check my work 5. value: 0.80 points Required information Problem 5-4A Part 4 Prepare a single-step income statement that includes these expense categories: cost of goods sold, selling expenses, and general and administrative expenses. Valley Company’s adjusted trial balance on August 31, 2013, its fiscal year-end, follows. Solution 1)Net sales : sales Revenue 239,400 less:sales discount (2663) sales return and allowance (15800) net sales 219,937 2)cost of merchandise purchased = Invoice cost of merchandise + freight in -disocunt - allowances = 102900+3900-2161-4939 = $ 99,700
- 3) 4)Sales239,400less:Discount(2663)allowances and returns(15800)net sales revenue219,937less:Cost of goods sold(92,945 )gross margin126,992less:Operatin expenseselling :Sales salaries 32,798Rent selling 11,252 Advertising 20,349(64,399)General andStore supplies 2,873Office salary 29,925 Rent 2873office supplies 958(36,629)Total operating expenseNet Income25,964

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