I think it is C.
But I am not sure.
Answer:
1. C. To increase total invested capital
2. B. 98%
Explanation:
(1). An organization monitors its inventory to ensure it has enough quantity of raw materials, so the production process is not disrupted.
Also when an organization purchases inventory in bulk, it gets a discount on the purchase price.
An organization also manages its inventory to ensure it has a range of goods available in anticipation of customers' demands.
<u>Inventory does NOT increase the total amount of capital invested.</u>
(2). Probability (risk) of stockout = 2% = 0.02
Service level = 1 - stockout risk
Service level = 1 - 0.02 = 0.98 = 98%
Answer:
See
Explanation:
1. Break even point in units
= Fixed cost / Selling price per unit - Variable cost per unit
Given that
Fixed cost = $600,000
Selling price per unit = $375
Variable cost per unit = $300
Break even point in units = $600,000 / ($375 - $300)
= $600,000 / $75
= 8,000 units
2. Break even in sales
= Fixed cost / Selling price unit - Variable cost per unit × Selling price per unit.
=[ $600,000 / ($375 - $300) ] × $375
= 8,000 × $375
= $3,000,000