FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Pls answer the all questions with solutions
4. Precio Jewels Corporation produces quality jewelry items for various retailers. For the coming year, it has estimated it will consume 500 ounces of gold. Its carrying costs for a year are P2 per ounce. No safety stock is maintained. If the EOQ is 100 ounces, what is the cost per order?
a. P40 b. P20 c. P5 d. P25
5. A company has estimated its economic order quantity for Part A at 2,400 units for the coming year. If ordering costs are P200 and carrying costs are P0.50 per unit per year, what is the estimated total annual usage?
a. 6,000 units b. 28,800 units c. 7,200 units d. 2,400 units
6. A company annually consumes 10,000 units of Part C. 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. By how much could the company reduce its total costs if it purchased the economic order quantity instead of 500 units?
a. P500 b. P2,000 c. P2,500 d. P0
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by stepSolved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Lee Company produces and sells running shoes. Sales volumes have remained stable in recent years. Financial data relating to the running shoes are as follows: $ $ Selling price 45 Variable cost (35) Fixed cost apportionment (5) (40) Profit 5 Lee Company has recently been approached by a wholesale business that wishes to buy 40,000 pairs each year but has demanded a three-month credit period. Lee Company is concerned that if the demand is accepted, its other customers, who are allowed only a one-month credit, will make similar demands. The current level of sales is 150,000 pairs each year. If the wholesaler order is accepted, 15,000 extra pairs will have to be held in inventories (where inventories are valued at total cost) and trade payables will increase by $ 650,000. The business expects a return of 35 per cent on it net investment. Required: Assess the acceptability of the offer made by the wholesaler to Lee Company on the basis that: All customers will receive a credit period of…arrow_forwardWhat is the economic-order quantity (rounded to nearest whole lens)?arrow_forwardThe Perez Corporation manufactures and sells T-shirts imprinted with college names and slogans. Last year, the shirts sold for P7.50 each, and the variable cost to manufacture them was P2.25 per unit. The company needed to sell 20,000 shirts to break even. The net income last year was P5,040. Harper's expectations for the coming year include the following: The sales price of the T-shirts will be P9 2.Variable cost to manufacture will increase by one-third 3.Fixed costs will increase by 10% 4.The income tax rate of 40% will be unchanged The selling price that would maintain the same contribution margin rate as last year isarrow_forward
- Subject - account Please help me. Thankyou.arrow_forward1. The best-sselling pair of shoes Footstep sells for P499.99 a pair. The store consistently selis 7000 pairs of these shoes every year. The fixed costs to order more shoes is P80 and the carrying costs are P2.25 per pair. a) What is the economic order quantity? (whole number) b.) How much is the carrying cost? (2 decimal point) 2. Each year you sell 950 units of earphones at a price of P399 each. The variable cost per unit is P675 and the carrying cost per unit is P18.00. Your fixed cost of ordering is P60. a.) What is the economic order quantity? (whole number) b.) How much is the carrying cost? (2 decimal point) c.) How much is the ordering cost if ordering quantity is 100? (2 decimal point)arrow_forwardThe Widget Co. currently sells 800 widgets per week for a price of $7.00 each. Their market research indicates that for each $0.50 increase in price they will sell 25 fewer widgets per week. What price should they charge to maximize sales income?arrow_forward
- A coat manufacturer wants to build a large factory or a small factory. The profit per coat is estimated as $12. Per year, a small factory's cost is $200,000, with a production capacity of 50,000 coats and a large factory's cost is $450,000, with a production capacity of 100,000 coats. The four levels of manufacturing demand that are considered likely are 30,000, 40,000, 50,000, and 100,000 coats per year. Complete parts (a) through (e). a. Determine the payoffs for the possible levels of production for a small factory. Manufacturing demand (coats per year) Payoff ($) 30,000 40,000 50,000 100,000 (Simplify your answers.)arrow_forwardA manufacturer of calculators has a fixed cost of $24,000 per month. Suppose that the marginal cost of producing a calculator is $40, and the calculators sell for $115 each. How many calculators must the company produce and sell per month to break-even? Calculate the answer by read surrounding text. Round to the nearest whole number of calculators.arrow_forwardcould you explain easily?arrow_forward
- A company that manufactures cars would use about 50,000 steering wheels per year. Such steering wheel is being ordered from a supplier that would cost the company P1,250.00 per order. It would also costs 40% of the steering wheel's cost to keep it annually. The steering wheel costs P7,500.00 each. How many steering wheels should be ordered at one time?arrow_forwardQuestion 2: An item may be bought for a price of $12 a piece. Making it would require buying a machine for $60,000 to be paid now, and running expenses of $5,000 per year to be paid at the end of each year. In addition to these fixed expenses, raw material cost is $5 per piece. What is the maximum annual demand for which buying is better than making? Assume that the vendors get paid at the end of the year. Also, assume that the machine has a useful life of 5 years with a salvage value of 15,000. Use i of 11%.arrow_forwardMax's Brakes is introducing a new revolutionary brake-pad for vehicles that will never wear out. Max's will sell the pads for $100 a pair and they will cost $80 in variable costs to produce. If cash fixed expenses are $1,500 per year and the depreciation and amortisation expenses are $600 per year, then what is the Accounting Operating Profit Break-Even point for Max's? a. 8 pairs b. 21 pairs c. 75 pairs d. 105 pairsarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education