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olganol [36]
3 years ago
9

Cycles de Oro produces 120,000 high-tek bikes a year and orders the brake assembly from IKON for $15.40 each. The order cost is

$84 and Cycles estimates their inventory carrying costs are 15%. What is their total ordering cost per year?
Business
1 answer:
Ket [755]3 years ago
3 0

Answer:

$3,412

Explanation:

The computation of the economic order quantity is shown below:

= \sqrt{\frac{2\times \text{Annual demand}\times \text{Ordering cost}}{\text{Carrying cost}}}

= \sqrt{\frac{2\times \text{120,000}\times \text{\$84}}{\text{\$2.31}}}

= 2,954 units

The carrying cost is

= $15.40 × 15%

= $2.31

The number of orders would be equal to

= Annual demand ÷ economic order quantity

= 120,000 ÷ 2,954 units

= 40.62 orders

Now The total cost of ordering cost is

Ordering cost = Number of orders × ordering cost per order

= 40.62 orders × $ 84

= $3,412

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3 years ago
In its first month of operations, Literacy for the Illiterate opened a new bookstore and bought merchandise in the following ord
Dahasolnce [82]

Answer:

Find the detailed answer below

Explanation:

January 1     300 units at $5      $1,500

January 8     500 units at $9       $4,500

January 29 910 units at $10       $9,100

1,110 units are available at the end of the month. That means 600 units were sold

A. Under FIFO

1. Cost of goods available for sale:

        $1,500 + $4,500 + $9,100 = $15,100

2.   Cost of goods sold

         300 units at $5      $1,500

         300 units at $9      $2,700

          Total             $4,200

3. Ending inventory

           200 units at $9       $1,800

           910 units at $10      $9,100

           Total              $10,900

B. Under LIFO(Last in First Out)

1.  Cost of goods available for sale:

        $1,500 + $4,500 + $9,100 = $15,100

2.  Cost of goods sold

        600 units at $10      $6,000

        Total       $6,000

3. Ending inventory

       310 units at $10      $3,100

      500 units at $9        $4,500

      300 units at $5        $1,500

      Total        $9,100

C. Weighted average cost flow assumption: Cost of goods available for sale / total units

1. Cost of goods available for sale:

     $1,500 + $4,500 + $9,100 = $15,100

2. Cost of goods sold

      $15,100 / 1,710 = $8.83

      $8.83 x 600 = $5,298

3. Ending inventory

       $8.83 x 1,110 = $9,801.3

Under perpetual Inventory System

Between January 9 and January 28. The prevailing price that will be used to sell the inventory will be the price at January 8($9)

1. Cost of goods available for sale:

$1,500 + $4,500 + $9,100 = $15,100

2.  Cost of goods sold

        600 units at $9     $5,400

        Total           $5,400

3. Ending inventory

       1,110 units at $9      $9,990

      Total            $9,990

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2 years ago
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3 years ago
Mike sells small-business health insurance programs, working on straight commission. Closing the sale is an extremely stressful
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If closing the sale is an extremely stressful point for him. If he does not close the sale, the outcome will be he will generate no income.

<h3>What is income?</h3>

Income can be defined as a the cash receive from the sales of goods and services.

Based on the given scenario in a situation were Mike did not close the sale for the day this will tend to mean that he will generate no revenue or income reason being that closing the sale will enables him to generate income.

Therefore the outcome will be he will generate no income.

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Answer:

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