Answer:
Minimun cost: $2000
Explanation:
We solve for the optimal order size using the
Economic Order Quantity:
<u>Where: </u>
D = annual demand = 2,000 boxes
S= setup cost = ordering cost = $ 100
H= Holding Cost = $10.00
EOQ 200
It should order: 2,000 demand / 200 order size = 10 times
At a cost of 1,000 dollar (100 units x $ 10)
It will face an average inventory of 100 units thus holding cost:
100 units x 10 dollar per unit = 1,000
Total cost: 1,000 + 1,000 = 2,000
Answer:
(A) 352,410
(B) 328,910
(C) 474,120
(D) 461,770
(E) 165,000
(F) 175,000
Explanation:
1.- WIP, August 1st: $ 19,660 $ 41,650 (e)
2.- Cost added $ 332,750 (c) $ 1,075,000
3.- Subtotal (a) $ 515,770 $ 1,240,000
4.- WIP, August 31th $ 23,500 $ 54,000 (f)
5.- COGM (b) (d) $1,068,000
The identity to solve for this is as follow:
<u>The third row is the sum of the left side of the of the equation.</u>
beginning WIP + cost added.
(a) 332,750 + 19,660 = 352,410
(c) 515,770 - 41,650 = 474,120
(e) 1,240,000 - 1,075,000 = 165,000
COMG will be third row less fourth row
the ending WIP subtracted from the left side
(b) 352,410 - 23,500 = 328,910
(d) 515,770 - 54,000 = 461,770
(f) 1,240,000 - 1,068,000 = 175,000