The Pom II requires 2 processor chips, 16 memory chips, and 20 vacuum tubes, while the Pom Classic requires 1 processor chip, 4 memory chips, and 40 vacuum tubes. Microbucks has in stock at the beginning of the year 500 processor chips, 6,000 memory chips, and 9,000 vacuum tubes at the Pom II factory, and 150 processor chips, 2,000 memory chips, and 20,000 vacuum tubes at the Pom Classic factory. It manufactures 50 Pom IIs and 50 Pom Classics each month. Microbucks Computer Company, besides having the stock mentioned above, gets shipments of parts every month in the amounts of 110 processor chips, 1,000 memory chips, and 3,000 vacuum tubes at the Pom II factory, and 60 processor chips, 1,000 memory chips, and 2,200 vacuum tubes at the Pom Classic factory. (a) What will the company's inventory of parts be after 6 months? Processor chips Memory chips Vacuum tubes Pom II factory Pom Classic factory (b) When (if ever) will the company run out of one of the parts? O The company will run out of parts in 6 months. O The company will run out of parts in 12 months. O The company will run out of parts in 18 months. O The company will run out of parts in 24 months. O The company will never run out of parts.

The Pom II requires 2 processor chips, 16 memory chips, and 20 vacuum tubes, while the Pom Classic requires 1 processor chip, 4 memory chips, and 40 vacuum tubes. Microbucks has in stock at the beginning of the year 500 processor chips, 6,000 memory chips, and 9,000 vacuum tubes at the Pom II factory, and 150 processor chips, 2,000 memory chips, and 20,000 vacuum tubes at the Pom Classic factory. It manufactures 50 Pom IIs and 50 Pom Classics each month. Microbucks Computer Company, besides having the stock mentioned above, gets shipments of parts every month in the amounts of 110 processor chips, 1,000 memory chips, and 3,000 vacuum tubes at the Pom II factory, and 60 processor chips, 1,000 memory chips, and 2,200 vacuum tubes at the Pom Classic factory. (a) What will the company's inventory of parts be after 6 months? Processor chips Memory chips Vacuum tubes Pom II factory Pom Classic factory (b) When (if ever) will the company run out of one of the parts? O The company will run out of parts in 6 months. O The company will run out of parts in 12 months. O The company will run out of parts in 18 months. O The company will run out of parts in 24 months. O The company will never run out of parts.

Name: None Inventory Microbucks Computer Company makes two computers, the Po
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Description: None Inventory Microbucks Computer Company makes two computers, the Pomegranate II and the Pomegranate Classic, at two different factories.The Pom II requires 2 processor chips, 16 memory chips, and 20 vacuum tubes, while the Pom Classic requires 1 p

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints

Section: Chapter Questions

Problem 7E: Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The...

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Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The cost of placing an order is 30. The cost of holding one unit of inventory for one year is 15.00. Currently, Ottis places 160 orders of 4,000 plastic housing units per year. Required: 1. Compute the economic order quantity. 2. Compute the ordering, carrying, and total costs for the EOQ. 3. How much money does using the EOQ policy save the company over the policy of purchasing 4,000 plastic housing units per order?
Cortez Company sells chairs that are used at computer stations. Its beginning inventory of chairs was 100 units at $60 per unit. During the year, Cortez made two batch purchases of this chair. The first was a 150-unit purchase at $68 per unit; the second was a 200-unit purchase at $72 per unit. During the period, it sold 270 chairs. Required Determine the amount of product costs that would be allocated to cost of goods sold and ending inventory, assuming that Cortez uses a. FIFO. b. LIFO. c. Weighted average. Cost of goods sold Ending inventory FIFO LIFO Weighted Average
Cortez Company sells chairs that are used at computer stations. Its beginning inventory of chairs was 230 units at $45 per unit. During the year, Cortez made two batch purchases of this chair. The first was a 260-unit purchase at $50 per unit; the second was a 390-unit purchase at $52 per unit. During the period, it sold 570 chairs. Required Determine the amount of product costs that would be allocated to cost of goods sold and ending inventory, assuming that Cortez uses a. FIFO. b. LIFO. c. Weighted average. Do not round intermediate calculations. Round your final answers to nearest whole dollar amount. Cost of goods sold Ending inventory FIFO LIFO Weighted Average
Inventory Microbucks Computer Company makes two computers, the Pomegranate II and the Pomegranate Classic, at two different factories. The Pom II requires 2 processor chips, 16 memory chips, and 20 vacuum tubes, while the Pom Classic requires 1 processor chip, 4 memory chips, and 40 vacuum tubes. Microbucks has in stock at the beginning of the year 500 processor chips, 6,000 memory chips, and 9,000 vacuum tubes at the Pom II factory, and 150 processor chips, 2,000 memory chips, and 20,000 vacuum tubes at the Pom Classic factory. It manufactures 50 Pom IIs and 50 Pom Classics each month. Microbucks Computer Company, besides having the stock mentioned above, gets shipments of parts every month in the amounts of 110 processor chips, 1,000 memory chips, and 3,000 vacuum tubes at the Pom II factory, and 60 processor chips, 1,000 memory chips, and 2,200 vacuum tubes at the Pom Classic factory. (a) What will the company's inventory of parts be after 6 months? Pom II factory Pom Classic…
Cortez Company sells chairs that are used at computer stations. Its beginning inventory of chairs was 180 units at $49 per unit. During the year, Cortez made two batch purchases of this chair. The first was a 270-unit purchase at $54 per unit; the second was a 355-unit purchase at $56 per unit. During the period, it sold 500 chairs. Required Determine the amount of product costs that would be allocated to cost of goods sold and ending inventory, assuming that Cortez uses a. FIFO. b. LIFO. c. Weighted average. (Do not round intermediate calculations. Round your final answers to nearest whole dollar amount.) Weighted Average FIFO LIFO Cost of goods sold Ending inventory
Cortez Company sells chairs that are used at computer stations. Its beginning inventory of chairs was 140 units at $65 per unit. During the year, Cortez made two batch purchases of this chair. The first was a 130-unit purchase at $74 per unit; the second was a 228-unit purchase at $78 per unit. During the period, it sold 288 chairs. Required Determine the amount of product costs that would be allocated to cost of goods sold and ending inventory, assuming that Cortez uses: a. FIFO. b. LIFO. c. Weighted average.
Auto Zone purchases replacement brake fluid reservoirs directly from the manufacturer. Demand is roughly 1000 units per month over the year. Ordering costs are $25 per order and the reservoirs are $10.00 per unit. Annual holding costs are 20% of the value of the inventory. There are 311 working days per year and the lead time is 5 days. Address the following inventory management issues that need to be resolved. a) What is the EOQ for this component? b) What is the reorder point? c) What is the cycle time? d) What are the total annual holding and ordering costs associated with your recommended EOQ?
Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The cost of placing an order is $30. The cost of holding one unit of inventory for one year is $15.00. Currently, Ottis places 160 orders of 4,000 plastic housing units per year. REQUIRED: 1. Compute the annual ordering cost. 2. Compute the annual carrying cost. 3. Compute the cost of Ottis’s current inventory policy. Is this the minimum cost? Why or why not?
Taylor Bashir Limited uses a range of raw materials in its production of metal filing cabinets, including a bought in metal handle component. Because of a shortage of the grade of metal used in the component, prices have tended to rise rapidly. During September 20X5 the following deliveries into inventory and transfers to production of metal handles take place: 1 September Balance of inventory @ £2.70 per unit 130 6 September Transfer to production 60 7 September Delivery of inventory @ £2.90 per unit 40 18 September Transfer to production 30 26 September Delivery of inventory @ £2.96 per unit 85 What is the value of the transfers to production of metal handles in September (to the nearest penny)?" O 258.30 O E473.41 O E307.60 O (245 19
Item X is a standard item stocked in a company's inventory of component parts. Each year the firm, on a random basis, uses about 1,700 of item X, which costs $25 each. Storage costs, which include insurance and cost of capital, amount to $4 per unit of average inventory. Every time an order is placed for more of item X, it costs $22.a. Whenever item X is ordered, what should the order size be? (Round your answer to the nearest whole number.) b. What is the annual cost for ordering item X? (Round your answer to 2 decimal places. Round your intermediate calculation.)c. What is the annual cost for storing item X? (Round your answer to 2 decimal places. Round your intermediate calculation.)
The F Inc.’s materials manager is considering the installation of a just-in-time (JIT) inventory system for L-20, one of the chemicals used in the production process. Currently, the chemical is purchased for $30 each pound. The firm uses 4,800 pounds L-20 per year. The controller estimates that it costs $150 to place and receive a typical order of L-20. The annual cost of storing L-20 is $1 per pound. F Inc.’s manufacturing engineering team identifies the following effects of adopting a JIT inventory system: 1) F Inc. will order 100 pounds L-20 each time. 2) The cost of placing an order for L-20 will be reduced to $20. 3) Suppliers would add $4 to the price per pound for frequent deliveries. 4) Currently there is a defect-assessment cost of $120,000 per year. This cost is expected a reduction of 20% under the JIT system. F Inc. requires a 10% annual rate of return on investment Required: From a financial perspective, determine whether it is in the best interest of F to…
RYX Manufacturing Company uses 1,000 units of Chip annually in its production. Order costs consist of P10 for placing a long-distance call to make the order and P40 for delivering the order by truck to the company warehouse. Each Chip costs P100 and the carrying costs are estimated at 15.625% of the inventory cost. What is the economic order quantity for Chip? _______________.