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lorasvet [3.4K]
2 years ago
6

A gift shop sells 2000 boxes of scented candles a year. The ordering cost is $100 for scented candles, and holding cost is $10 p

er box per year. What is the minimum annual amount of these combined costs the gift shop could pay?
$100

$1000

$2000

$200

$1200
Business
1 answer:
Gekata [30.6K]2 years ago
6 0

Answer:

Minimun cost: $2000

Explanation:

We solve for the optimal order size using the

Economic Order Quantity:

Q_{opt} = \sqrt{\frac{2DS}{H}}

<u>Where: </u>

D = annual demand = 2,000 boxes

S= setup cost = ordering cost = $ 100

H= Holding Cost = $10.00

Q_{opt} = \sqrt{\frac{2(2,000)(100)}{10}}

Q_{opt} = \sqrt{40,000}

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

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Answer:

$36,000

Explanation:

Net Cash = Net Income for 2016 - Accounts Receivable + Decrease in inventory + Depreciation expense - Gain on sale of equipment

=> Net Cash = $40,000 - $ 4,000 + $2,000 + $3,000 - $5,000

=> Net Cash = $36,000

3 0
3 years ago
The operations vice president is adjusting the production quantities for the upcoming month of March for the coal company. Last
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Answer:

The correct answer is letter "B": Increase output and hire more workers.

Explanation:

According to the supply law, if the price increases so will the quantity supplied and if the price decreases the same will happen with the quantity supplied. We could say that the relationship between price and quantity supplied is directly proportional.

In the example, <em>as the price of coal increased so will the quantity supplied</em>. <em>If there is to be more supply the output should be higher which is likely to be interpreted in a need for more employees</em>.

6 0
3 years ago
Gilson Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and
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Answer:

a. $2,020 Favorable

Explanation:

The computation of spending variance for direct materials in April is shown below:-

For computing the spending variance for direct materials in April first we need to find out the actual price per unit which is here below:-

Actual price per unit = Actual direct material ÷ Actual units purchased

= $49,086 ÷ $5,060

= $9.70

Spending variance for direct materials in April = (Actual price per unit - Standard price per unit) × Actual quantity

= ($9.70 - $10.10) × 5,060

= -$0.4 × 5,060

= $2,024 Favorable

which is closest to $2,020 Favorable.

3 0
3 years ago
Which of the following bonds is the most sensitive to changes in market interest rates?A) 5-year, zero couponB) 5-year, 5 percen
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Answer:

D) 10-year, zero coupon

Explanation:

The zero coupon bonds with longer maturity period are more sensitive to interest rate changes than coupon payments bonds with the same maturity date and  zero coupon bonds with shorter maturity periods.

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3 years ago
Marginal benefit is the * 1 point a) increase in net benefit that a person receives from consuming another unit of a good. b) ad
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Answer:

d) change in total benefit that occurs when a person consumes another unit of the good.

Explanation:

Marginal cost can be defined as the additional or extra cost that is being incurred by a company as a result of the production of an additional unit of a product or service.

Generally, marginal cost can be calculated by dividing the change in production costs by the change in level of output or quantity.

Utility can be defined as any satisfaction or benefits a customer derives from the use of a product or service.

This ultimately implies that, any satisfaction or benefits a customer derives from the use of a product or service is generally referred to as a utility.

Furthermore, the marginal utility of goods and services is the additional satisfaction that a consumer derives from consuming or buying an additional unit of a good or service.

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