10.7. A company manufactures and sells a seasonal product. Based on the salesforecast that follows, calculate a level production plan, quarterly endinginventories, and average quarterly inventories. Assume that the average quarterlyinventory is the average of the starting and ending inventory for the quarter. Ifinventory carrying costs are $3 per unit per quarter, what is the annual cost ofcarrying this anticipation inventory? Opening and ending inventories are zero.ANSWER. Annual inventory costs = $6000SalesProductionEnding InventoryAverage InventoryInventory CostQuarter 11000Quarter 22000Quarter 33000Quarter 42000Totals

Inventory management is an important part from financial point of view as inventory involves two…

Answered: 10.7. A company manufactures and sells…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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PA1. 10.1 When prices are rising (inflation), which costing method would produce thehighestvalue for gross margin? Choose between first-in, first-out (FIFO); last-in, first-out (LIFO); and weighted average (AVG). Evansville Company had the following transactions for the month. Number of Units Cost per Unit $6,000 7,000 7,500 Purchase 2 Purchase 3 Purchase 4 Calculate the gross margin for each of the following cost allocation methods, assuming A62 sold just one unit of these goods for $10,000. Provide your calculations. A. first-in, first-out (FIFO) B. last-in, first-out (LIFO) C. weighted average (AVG)
Suppose that a firm applies the continuous- review inventory model to management its inventory of a product. Daily demand follows the normal distribution with mean 20 units and standard deviation 3 units. The firm currently uses the order size Q=500 units. Order lead time is 4 days. Assuming 300 working days in a year, what is the time between the placement of two consecutive orders? a. 4 days b. 12days c. 25days d. 30days e.none of ghe above
1. Projected sales for Sommers, Inc., for next year and beginning and ending inventory data ar as follows: Sales Beginning inventory Desired ending inventory The selling price is $40 per unit. Each unit requires four pounds of material which costs $6 per pound. The beginning inventory of raw materials is 12,000 pounds. The company wants to have 3,000 pounds of material in inventory at the end of the year. Required: 50,000 units 4,000 units 8,000 units Sales budget Production budget Direct material budget Purchases budget
1 A firm uses an inventory item with the following characteristics. Cost per-item $ 6.00 Annual consumption 1,000 Fixed cost per order placed $30.00 Carrying cost of inventory (as a % of dollar value) 25% How many times should the product be reordered each year and what are the related ordering and carrying costs of inventory?
You are the manager of a successful retail operation. Inflation has been running at 3% per year on the cost of inventory. Which inventory cost flow assumption would you use? FIFO, LIFO, or average? Justify your answer. Which provides the higher gross margin vs. the lower gross margin and why?
22.Store B orders on a weekly basis. Its weekly demand is 50 units with a standard deviation of five units. The holding cost is $10 per unit per week and a 0.99 in-stock probability is desired. a) What is Store B's weekly inventory holding cost if lead time is two weeks? b) What is Store B's weekly inventory holding cost per unit?
The Company has two products: A and B. March sales forecast projects 15,000 units of A and 10,000 units of B are going to be sold at prices of $15 and $18, respectively. The desired ending inventory of A is 12% higher than the beginning inventory, which was 2000 units. How much are total March sales for A anticipated to be?
keep costs down, CGC maintains a warehouse but no showroom or retail sales outlets. CGC has the following information for the second quarter of the year: 1. Expected monthly sales for April, May, June, and July are $180,000, $150,000, $270,000, and $50,000, respectively. 2. Cost of goods sold is 45 percent of expected sales. 3. CGC's desired ending inventory is 55 percent of the following month's cost of goods sold. 4. Monthly operating expenses are estimated to be: . Salaries: $33,000. ° Delivery expense: 8 percent of monthly sales. • Rent expense on the warehouse: $2,500. • Utilities: $500. • Insurance: $330. • Other expenses: $430. Required: 1. Compute the budgeted cost of purchases for each month in the second quarter. 2. Complete the budgeted income statement for each month in the second quarter. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the budgeted cost of purchases for each month in the second quarter. Total Cost of…
Baryans Corporation provided the following partial income statements and detailed information for the past two years: 2021 2020 Changes Sales P360,000 P192,000 P168,000 Cost of sales 158,400 96000 62,400 Gross income 201,600 96,000 105,600 Unit selling price 150 120 Unit cost 66 60 Quantity sold 2,400 1,600 How much is the sales price variance? P72,000 unfavorable P57,600 unfavorable None of the other choices P72,000 favorable P57,600 favorable Refer to the case of Baryans Corporation. How much is the cost price variance? None of the other choices P14,400 unfavorable P57,600 unfavorable P14,400 favorable P57,600 favorable Refer to the case of Baryans Corporation. How much is the cost volume variance? P48,000 favorable None of the other choices…
A company has international sales with 90 days term. Their Inventory turnover period is 30 days. What is the difference in percentage of profit in a year if they decrease the selling term to 60 days? The cost of goods is 10 and their selling price is 12.5
"On average, a firm sells $2,500,000 in merchandise a month. Its cost of goods sold equals 80 percent of sales, and it keeps inventory equal to one-half of its monthly cost of goods on hand at all times. If the firm analyzes its accounts using a 360-day year, what is the firm's inventory conversion period?" Group of answer choices a. 360 days b. 180 days c. 30 days d. 15 days e. 10 days
Turney Company produces and sells automobile batteries, the heavy-duty HD-240. The 2017 sales forecast is as follows. Quarter HD-240 1 5,100 2 7,320 3 8,280 4 10,430 The January 1, 2017, inventory of HD-240 is 2,040 units. Management desires an ending inventory each quarter equal to 40% of the next quarter’s sales. Sales in the first quarter of 2018 are expected to be 25% higher than sales in the same quarter in 2017.Prepare quarterly production budgets for each quarter and in total for 2017. TURNEY COMPANYProduction Budgetchoose the accounting period Product HD-240 Quarter 1 2 3 4 Year select an opening Production Budget item Enter a number of units Enter a number of units Enter a number of units Enter a number of units select between addition and deduction…

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