Mr. Ahmed works in a bakery which operates 6 days a week, 52 weeks a year. The bakery needs flour which is delivered to the bakery at 10 OMR each order. Each operational day, Mr. Ahmed needs 10 bags of four10 kg weight each bag Each bag costs OMR 12. The annual holding cost per bag is 15% of the purchase price of bag. If the shelf life of the flour bags is 2 weeks only, and Mr. Ahmed orders only accordingly to meet the demand for 2 weeks each order, then what will be the total variable cost per year ?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Mr. Ahmed works in a bakery which operates 6 days a week, 52 weeks a year. The bakery needs flour which is delivered to the bakery at 10 OMR each order. Each operational day, Mr. Ahmed needs 10 bags of four10 kg weight each bag Each bag costs OMR 12. The annual holding cost per bag is 15% of the purchase price of bag. If the shelf life of the flour bags is 2 weeks only, and Mr. Ahmed orders only accordingly to meet the demand for 2 weeks each order, then what will be the total variable cost per year ?
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