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Norma-Jean [14]
3 years ago
15

Quarter-inch stainless-steel bolts, 1.5 inches long are consumed in a factory at a fairly steady rate of 50 per week. The bolts

cost the plant 3 cents each. It costs the plant $10 to initiate an order, and holding costs are based on an annual interest rate of 20 percent.
a. Determine the optimal number of bolts for the plant to purchase and the time between the placement of orders

b. What is the yearly holding and setup cost for this item?
Business
1 answer:
natta225 [31]3 years ago
6 0

Answer:

a.

EOQ = 2,944 units

b.

Setup cost = Numbers of Order x Ordering cost = $8.83

Holding Cost = $8.83

Explanation:

a.

Economic order quantity is the quantity at which business incur minimum cost. This is the level of order where the holding cost equals to the ordering cost of the business.

As per given data

Annual Demand = 50 per week x 52 weeks in a year = 2,600 bolts

Ordering cost = $10

Carrying cost = $0.03 x 20% = $0.006

EOQ =  \sqrt{\frac{2 X S X D}{H} }

EOQ = \sqrt{\frac{2 X 10 X 2,600}{0.006} }

EOQ = 2,943.92 = 2,944 units

b.

Setup cost = Numbers of Order x Ordering cost = (2,600 / 2,944) x $10 = $8.83

Holding Cost = (2,944 / 2) x $0.006 = $8.83

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Answer:

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Preparation of Journal entry for for a $100 purchase of supplies on credit

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3 years ago
On July 1, 2022, Cullumber Co. pays $ 22,400 to Pharoah Insurance Co. for a 4-year insurance contract. Both companies have fisca
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Journal Entries in the books of Pharoah Insurance Co are as follows:

Date              Account Titles and Explanation     Debit       Credit

July 1, 2022 Cash                                            $22,400

Unearned Service Revenue                                             $22,400

To record the receipt of payment for insurance contract for 4 years.

Date                          Account Titles and Explanation     Debit       Credit

December 31, 2022 Unearned Service Revenue         $2,800

Service Revenue                                                                            $2,800

To record the service revenue earned from July 1, 2022 to December 31, 2022.

Data Analysis:

July 1, 2022 Cash $22,400 Unearned Service Revenue $22,400

December 31, 2022 Unearned Service Revenue $2,800 Service Revenue $2,800 ($22,400 x 6/48)

Thus, only $2,800 is credited to the Service Revenue account for the year ended December 31, 2022.

Learn more on adjusting Unearned Service Revenue at brainly.com/question/14783594

3 0
3 years ago
Steven's Co. provides the following sales forecast for the next three months: July August September Sales units 5,000 5,700 5,56
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Answer:

d. 5,175 units.

Explanation:

The computation of the budgeted production units for July is shown below:

= Sale units + ending inventory units - beginning inventory units

where,  

Sale units is 5,000 units

Ending finished inventory units = 5,700 units × 25% = 1,425 units

Beginning finished inventory units = 1,250 units

Now put these units to the above formula  

So, the units would equal to  

= 5,000 units + 1,425 units - 1,250 units

= 5,175 units

5 0
2 years ago
A purely competitive firm finds that the market price for its product is $30.00. It has a fixed cost of $100.00 and a variable c
Alinara [238K]

Answer:

Yes $30 agsinst $19.50

The variable cost for the first 50 untis is $17.50

Yes $30 against $27.25

average variable cost for the first 100 units $26.25

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Explanation:

$100 fixed cost /50 units + 17.50 = 19.50 average cost

selling price: $30

100 fixed cost + 17.50 x 50 + 35 x 50 = 2725

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($17.50 x 50 + $35 x 50)/100 = 26.25

After the 50untis our profit will decrease as the marginal revenue is lower than marginal cost thus, we stuop production at the 50 units:

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Answer:

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A monopolistic competition is when there are many firms selling differentiated products in an industry. A monopolistic competition has characteristics of both a monopoly and a perfect competition. the demand curve is downward sloping. it sets the price for its goods and services.

examples of monopolistic competition are restaurants  

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