The production department for a company requires 3,600 Kg of raw material for manufacturing particular item per year. It has been estimated that the cost of placing an order is Rs. 36 and the cost c carrying inventory is 25 per cent of the investment in the inventories. The price is Rs. 10 per kg. Th purchase manager wishes to determine an ordering policy for raw material. Calculate (1) The optimal Ic size (2) The optimal order cycle time (3) The minimum yearly variable inventory cost (4) The minimun yearly total inventory cost.
Q: a product cell for wallace company has budgeted conversion costs of $420,000 for the year. the cell…
A: Per unit conversion cost=Budgeted conversion costsMinutes taken=$420,0002,100×6015=$50
Q: Bush Company produces two models, Jeb and George. Information regarding Jeb and George is summarized…
A: Solution:- Calculation of contribution per machine hour
Q: Please solve all questions
A: ECONOMIC ORDER QUANTITY Economic Order Quantity is shortly known as EOQ, and it is one of the…
Q: JPM is just about to launch a new product. Production capacity means that a maximum of 120 units can…
A: The question is related to Cost Management. The details are given.
Q: Maxim Company needed 3500 units of raw material every month starting from January till June due to…
A: 1 Calculate ending inventory for the above transactions:
Q: Manufacturing just completed a study of its purchasing activity with the objective of improving its…
A: Variances indicates the differences between the budgeted and actual values. In this, if the standard…
Q: To make a batch of 1,000 units of a certain item, it is estimated that 120 direct labor hours are…
A: Requirement a: Compute the total cost when the item is purchased.
Q: NOVOMAT manufactures and sells a single product from a single raw material. In its production…
A: Total raw material variances= Standard cost - actual cost Material price variance= Material price…
Q: Magnussen, Inc., uses the absorption costing approach to cost-plus pricing described in the text to…
A: Formula: Total product cost = Budgeted sales value x Unit product cost Multiplying budgeted sales…
Q: XYZ Company expects to produce and sell 15,000 units during the next year with no beginning or…
A: Budgeted cost of goods sold is calculated by adding the raw materials cost, labour cost, variable…
Q: Concord Corporation has 7000 units in beginning finished goods. The sales budget shows expected…
A: The production process of a company aligned with the desired ending inventory of the company, and…
Q: Ceder Company has compiled the following data for the upcoming year: • Sales are expected to be…
A: Cost of goods sold is the sum of all the direct costs incurred by the company in the process of…
Q: Dee and Co. is a small manufacturing company which has prepared the following monthly budgeted…
A: Solution:- 1)Calculation of sales revenue in value required to make a target profit of GH¢ 80,000 as…
Q: Neverland Ltd produces a range of products, including Product Y and Product Z. Each month 5,000…
A: Particulars Product Y Product Z Units produced 5000 5000 Units manufacturing rate / hour 50 50…
Q: XYZ Company expects to produce and sell 15,000 units during the next year with no beginning or…
A: As the questions asked have more than 1 question, the first question is answered. If you want the…
Q: jones inc. computes its buidgeted production for direct materials at 15,000 units. each unit…
A: The production budget is prepared in order to determine the expected inventory to be purchased in…
Q: ILCB has the following information relating to one of its products Direct material cost per unit…
A: Total cost means the cost of producing the units as per budget. Selling cost is exclude from…
Q: XYZ Company expects to produce and sell 15,000 units during the next year with no beginning or…
A: Budgeted cost of goods sold = Direct material + Direct labor + variable manufacturing overhead costs…
Q: The budgeted conversion costs for a just-in-time cell are $202,400 for 4,000 production hours. Each…
A: Raw material means the material purchased and still not enter in to the production lines. Work in…
Q: Dee and Co. is a small manufacturing company which has prepared the following monthly budgeted…
A: As posted multiple sub parts we are answering only first three sub parts kindly repost the…
Q: Ceder Company has compiled the following data for the upcoming year: Sales are expected to be…
A: Solution: Calculation of cost of goods sold: Particulars Amount ($) Opening Direct raw…
Q: Ceder Company has compiled the following data for the upcoming year: Sales are expected to be 14,000…
A: Income statement: Under this Statement showing the company’s performance over a period of time by…
Q: XYZ Company expects to produce and sell 15,000 units during the next year with no beginning or…
A: Budgeted cost of goods sold = Direct material + Direct labor + variable manufacturing overhead costs…
Q: Grady, Inc. manufactures model airplane kits and projects production at 650, 500, 450, and 600 kits…
A: Budgets are prepared to forecast the future costs and sales projections so as to facilitate proper…
Q: Lebar Daun Sdn Bhd is planning to use the economic order quantity model to determine the optimal…
A: Answer and calculations are given below
Q: A company manufactures computer games. The games are in demand all year round and in the next…
A: Disclaimer: "Since the question contains multiple sub-parts we solve first three sub-parts for young…
Q: A component used in a manufacturing facility is ordered from an outside supplier. Because the…
A: a.
Q: Evanson Company expects to produce 564,000 units of their product during the year. Monthly…
A: Solution Evanson Company Monthly Flexible Manufacturing budgeting Activity level…
Q: Lebar Daun Sdn Bhd is planning to use the economic order quantity model to determine the optimal…
A: Meaning of Economic Order Quantity:-…
Q: Machine Operator, manufacturer of shelving keeps stock of a wide range of components. The…
A: Solution Formulas 1- minimum stock level = Reorder level -(Average rate of consumption * Average…
Q: The manufacturing division manager of Davison Enterprises has submitted the following production…
A:
Q: Ceder Company has compiled the following data for the upcoming year: Sales are expected to be…
A: Budget means the expected value of future. Budget is not affected by the actual value as it is…
Q: I just need to know what the direct materials cost per ounce value is please
A: Direct materials require 7 ounces of plastic per kit Plastic cost is $5 per ounce.. Direct material…
Q: Patriot Oman predicts that it will use 360,000 kgs of materials during the year. The material is…
A: EOQ stands for the appropriate level of order quantity to be acquired in order to save money on…
Q: Evanson Company expects to produce 576,000 units of their product during the year. Monthly…
A: Formulas:
Q: During the current year, OutlyTech Corp. expected to sell 22,600 telephone switches. Fixed costs for…
A: Solution.. Selling price per unit = $3,300 Variable cost per unit = $1,440 Contribution margin…
Q: Phillips Corporation is a major manufacturer of food processors. It purchases motors from Viking…
A: Economic Order Quantity (EOQ): Economic order quantity is the quantity of order that is purchased…
Q: Ceder Company has compiled the following data for the upcoming year: • Sales are expected to be…
A: 1. Particulars Amount Direct material used (13000*4*3.3) $171600 Direct labor (13000*1.5*16)…
Q: XYZ Company expects to produce and sell 15,000 units during the next year with no beginning or…
A: Cost of goods sold: Cost of goods sold is the total of all the expenses incurred by a company to…
Q: Lebar Daun Sdn Bhd is planning to use the economic order quantity model to determine th optimal…
A: We have,Purchased 252 per box which contains 12 units of material Z i.e.252×12=3,024order=6,300 and…
Q: XYZ Company expects to produce and sell 15,000 units during the next year with no beginning or…
A: Budgeted cost of goods sold = Direct material + Direct labor + variable manufacturing overhead costs…
Q: Yammy Company currently produces ultimate discs in an automated process. Expected production per…
A: Note: Manufacturing fixed overhead costs will remains same at any level of production.
Q: Clothes, Inc., has an average annual demand for red, medium polo shirts of 25,000 units. The cost of…
A: Cost accounting is one of the important branch of accounting. Under this branch, all type of costs…
Q: Salam's company expects its production of pipes will require 600,000 tons of aluminum over its…
A: Economic order quantity is referred to as that level of the inventory which would generate the least…
Q: Cloud Shoes manufactures recovery sandals and is planning on producing 12,000 units in March and…
A: Particulars April Budgeted production 11500 Raw material required per unit (yards) 1.2 Raw…
Q: A company needs a specific type of stored materials, with a quantity of 150,000 pieces, the cost of…
A: This question deals with the calculation of EOQ, number of order and when to supply each order.…
Q: A company manufactures computer games. The games are in demand all year round and in the next…
A: Marginal costing is that type of costing under which all variable costs are part of cost of the…
Q: The XYZ company has traditionally ordered ink refills 80 units at a time. This company estimates…
A: Push systems - These inventory management systems stock and control inventory based on the forecasts…
Q: A company manufactures computer games. The games are in demand all year round and in the next…
A: '“Since the question have multiple sub-parts, we will solve first three sub-parts. If wants to get…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- The annual demand for a particular chemical product is 1,200 units. Suppose that the annualholding cost is $24 per unit, and the ordering cost is $100.Part A: Find the optimal order quantity based on EOQ analysis, and calculate the combinedannual ordering and holding cost.Part B: Now suppose that the store manager finds out that the demand has been underestimated.Specifically, the correct annual demand is 1,500 units. On the other hand, due to operationalrestrictions she cannot change the order quantity and thus use the same order size from part A.How much this error cost the store? (This can also be considered as a penalty for parametermisestimation).The production department of a company requires 3,600 kg of raw material for manufacturing a particular item per year. It has been estimated that the cost of placing an order is Rs 36 and the cost of carrying inventory is 25 per cent of the investment in the inventories. The price is Rs 10 per kg. Help the purchase manager to determine: (1) The optimal lot size. (ii) The optimal order cycle time Per year minimum total inventory variable cost Per year minimum total inventory cost (iii) (iv)The annual demand for an item of raw materials is 4,000 units and the purchase price is expected to be £90 per unit. The cost of placing an order is £135 and the cost of storage is estimated to be £12 per unit per annum. You are required to: Calculate the economic order quantity (EOQ) and the total relevant cost of this order quantity. Suppose that the £135 estimate of the cost of placing an order is incorrect and should have been £80. Assume that all other estimates are correct. What is the cost of this error to the business, assuming that the order size identified in part i is implemented for one year? Assume at the start of the period that a supplier offers to supply 4,000 units at a price of £86. The materials will be delivered immediately and placed in the stores. Assume that the cost of placing this order is zero and the original estimate of £135 for placing an order for the…
- An organisation manufactures a single product. The following information with regard to the raw material needed in the production process is supplied to you: Normal delivery time: 2.5 weeks Maximum delivery time: 3.5 weeks Normal usage: 52 000 units per year Purchase price per unit: R8.50 Cost of placing an order: R18.00 Interest rate: 2% per year Storing cost per unit: R2.50 a). Calculate the lead time demandThe quarterly demand for an item of raw materials is estimated at 2,000 units at a purchase price of GH¢180 per unit. It is estimated that the cost per order will be GH¢270 and the cost of holding a unit of material in inventory will be GH¢24.Required:i. Compute the optimal order quantity, and total minimum costs.ii. Suppose a supplier offers 5% quantity discount for purchase of 8,000 units, should the offer be acceptedAn organisation manufactures a single product. The following information with regard to the raw material needed in the production process is supplied to you: Normal delivery time: 2.5 weeks Maximum delivery time: 3.5 weeks Normal usage: 52 000 units per year Purchase price per unit: R8.50 Cost of placing an order: R18.00 Interest rate: 2% per year Storing cost per unit: R2.50 a). Calculate the safety stock b). Calculate the lead time c). Calculate the EOQ. d). Calculate the re-order point if the organisation does not keep safety stock. e). Calculate the re-order point if the organisation has a policy to keep safety stock. f). Calculate the safety stock that should be kept by the organisation.
- An organisation manufactures a single product. The following information with regard to the raw material needed in the production process is supplied to you: Normal delivery time: 2.5 weeks Maximum delivery time: 3.5 weeks Normal usage: 52 000 units per year Purchase price per unit: R8.50 Cost of placing an order: R18.00 Interest rate: 2% per year Storing cost per unit: R2.50 a). Calculate the safety stock b). Calculate the lead timeIf the price of the material is RO 15 per unit and the annual consumption is 4000 units, the interest and store keeping charges are 20% of the value and the cost of placing of an order and receiving the goods is RO 60, how much material should be ordered at one time?A manager must decide which type of machine to buy, A, B, or C. Machine costs (per individual machine) are as follows Machine Cost $50,00e $40,000 $70,000 A. Product forecasts and processing times on the machines are as follows: PROCCESSING TIME PER UNIT (minutes) Annua) Product Demand 12,000 21,000 11,000 25,000 A. 2. 1. 2. 2 2. 2. a. Assume that only purchasing costs are being considered. Compute the total processing time required for each machine type to meet demand, how many of each machine type would be needed, end the resulting total purchasing cost for each machine type. The machines will operate 10 hours a day, 230 days a year. (Enter total processing times as whole numbers. Round up machine quantities to the next higher whole number. Compute total purchasing costs using these rounded machine quentities. Enter the resulting total purchasing cost as a whole number.) Total processing time in minutes per machine B. C. Number of each machine needed and total purchasing cost A.…
- In the process of finding the optimum order quantity the following costs are obtained per order or per unit annually. Inspection Cost = SR 4 Cost of Interest = SR 4 Insurance Cost = SR 2 Administration Cost = SR 4 Obsolescence = SR 3 Depreciation Cost = SR 2 Breakage Cost = SR 2 Given that the annual Demand is 500,000. Number of order?A company is analyzing a make-versus-purchase situation for a component used in several products and the engineering department has developed these data: Option A: Purchase 10,000 items per year at a fixed cost of Php 340 per item. The cost of placing the order is negligible according to the present cost accounting procedure. Option B: Manufacture 10,000 items per year, using available capacity in the factory. Cost estimates are direct materials= Php 200 per item and direct labor = Php 60 per item. Manufacturing overhead is allocated at 200% of direct labor. Based on these data, should the item be purchased or manufacture?My Kitchen Delights (MKD) is considering two newsuppliers for the jars used in the production process. Th e qualityat both suppliers is equal. Assume that the annual holding costis 30 percent of the unit price. Monthly demand averages 20,000jars. Ordering cost with these two suppliers is $30 per order. Th eprice lists for the suppliers are as follows: (a) Determine the optimal order quantity when usingSupplier A.(b) Determine the optimal order quantity when usingSupplier B.(c) Given MKD’s lack of space, which supplier do yourecommend be used? Justify your answer.