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22. The company has P5,000,000 n in inventory and P2,000,000 in accounts receivable. Its average daily sales are P100,000. The company's payables deferral period (accounts payable divided by daily purchases) is 30 days. What is the length of the company's cash conversion cycle? A. 100 days B. 60 days C. 50 days D. 40 days

22. The company has P5,000,000 n in inventory and P2,000,000 in accounts receivable. Its average daily sales are P100,000. The company's payables deferral period (accounts payable divided by daily purchases) is 30 days. What is the length of the company's cash conversion cycle? A. 100 days B. 60 days C. 50 days D. 40 days

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Pls answer number 22 to number 26 with solutions
22. The company has P5,000,000 n in inventory and P2,000,000 in accounts receivable. Its average daily sales are P100,000. The company's payables deferral period (accounts payable divided by daily purchases) is 30 days. What is the length of the company's cash conversion cycle? A. 100 days B. 60 days C. 50 days D. 40 days 23. A company annually consumes 10,000 units of Part X. The carrying cost of this part is P2 per year and the ordering costs are P100. The company uses an order quantity of 500 units. If the company operates 200 days per year, and the lead time for ordering Part X is 5 days, what is the order point? A. 250 units B. 1,000 units C. 500 units D. 2,000 units 24 – 25. The Corporation operates its factory 300 days per year. Its annual consumption of Material A is 1,200,000 gallons. It carries a 10,000-gallon safety stock of Material A and its lead time is 12 business days. 24. What is the order point for Material A? A. 10,000 gallons B. 38,000 gallons C. 48,000 gallons D. 58,000 gallons 25. If the EOQ for Material A is 30,000 gallons, and the carrying cost per gallon per year is PO.25, what is the total annual carrying cost for Material A? А. Р3,750 В. Р7,500 С. Р6,250 D. P10,000 ABAY 26. The Corporation consumes 1,200,000 gallons of Material Y per year. Its order quantity is 30,000 gallons. It maintains a safety stock of 10,000 gallons and its annual carrying costs are PO.25 per gallon per year. If the ordering cost is P20 per order, what are the total annual ordering costs? А. Рб00 В. Р800 С. Р8,300 D. P1,200
Transcribed Image Text:22. The company has P5,000,000 n in inventory and P2,000,000 in accounts receivable. Its average daily sales are P100,000. The company's payables deferral period (accounts payable divided by daily purchases) is 30 days. What is the length of the company's cash conversion cycle? A. 100 days B. 60 days C. 50 days D. 40 days 23. A company annually consumes 10,000 units of Part X. The carrying cost of this part is P2 per year and the ordering costs are P100. The company uses an order quantity of 500 units. If the company operates 200 days per year, and the lead time for ordering Part X is 5 days, what is the order point? A. 250 units B. 1,000 units C. 500 units D. 2,000 units 24 – 25. The Corporation operates its factory 300 days per year. Its annual consumption of Material A is 1,200,000 gallons. It carries a 10,000-gallon safety stock of Material A and its lead time is 12 business days. 24. What is the order point for Material A? A. 10,000 gallons B. 38,000 gallons C. 48,000 gallons D. 58,000 gallons 25. If the EOQ for Material A is 30,000 gallons, and the carrying cost per gallon per year is PO.25, what is the total annual carrying cost for Material A? А. Р3,750 В. Р7,500 С. Р6,250 D. P10,000 ABAY 26. The Corporation consumes 1,200,000 gallons of Material Y per year. Its order quantity is 30,000 gallons. It maintains a safety stock of 10,000 gallons and its annual carrying costs are PO.25 per gallon per year. If the ordering cost is P20 per order, what are the total annual ordering costs? А. Рб00 В. Р800 С. Р8,300 D. P1,200
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