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nydimaria [60]
3 years ago
11

The S&H Mercantile in Luther is the only game in town for a number of items, and tries valiantly to use only the storage spa

ce needed to display items since there is no stock room in the back of the store. One popular item, a 16-ounce can of dehydrated water, takes up 20 square inches of shelf space. The shelf space available for this item measures five feet by four feet. The store manager would like to order a quantity that can fill the shelf space without stacking and without needing to store cans elsewhere in the store. The amount ordered should all be on display once the S&H runs out and ideally would arrive just as the last can is purchased.
A. Suppose the annual demand is 8,000 units and the cost per can is $3 with a holding cost of 10%. What is the required order cost per lot?
B. Drought conditions spike demand during the summer to an annualized rate of 27,000 cans per year and the price rises to $12 per can with a holding cost of 20%. What is the required order cost per lot?
Business
1 answer:
Artemon [7]3 years ago
4 0

Answer:

A. The required order cost per lot is $0.388

B. The required order cost per lot is $0.9216

Explanation:

A. According  to the given data Given area of shelf space = 5 Ft * 4 Ft = 20 Sq. Ft

Let us covert it to Sq. inch

1 Ft = 12 Inches

Therefore , Area of shelf space = 20 *12 * 12 = 2,880 Sq. in

1 can of water takes 20 Sq inch of shelf space

Therefore no. of cans that the shelf space can hold = 2880 / 20 = 144 Cans

Now SH wants to store exact amount of shelf space without needing to store cans somewhere elseand hence this 144 cans becomes EOQ (Economic order Qty.)

Now we know EOQ = √(2KD) / h ----Eq. 1

EOQ = 144

K = Fixed ordering cost = ?

D = Annual demand = 8000

h = Holding cost = ?

C = Cost per can = $ 3

i = 10 % (Carrying cost as percentage of Unit cost)

h = i * C

h = 10 % * $ 3

h = $ 0.3

Substituting above in Eq. 1 and solve for K

EOQ = √ (2KD) / h

144 = √(2 * K * 8000) / 0.3

Squaring both sides we get

20,736 = (16,000 * K ) / 0.3

20,736 * 0.3 = 16,000 * K

K = 6220.8 /16000

K = $ 0.388 = Ordering cost per order

The required order cost per lot is $0.388

B.  Here EOQ remains same = 144  But other parameters change

K = Fixed ordering cost = ?

D = Annual demand = 27,000

h = Holding cost = ?

C = Cost per can = $ 12

i = 20 % (Carrying cost as percentage of Unit cost)  

h = i * C

h = 20 % * $ 12

h = $ 2.4

Substituting above in Eq. 1 and solve for K

EOQ =√(2KD) / h

144 =  √(2 * K * 27,000) / 2.4

Squaring both sides we get

20,736 = ( 54,000 * K ) / 2.4

20,736 * 2.4 = 54,000 * K

K = 49,766.4 /54,000

K = $ 0.9216 = Ordering cost per order

The required order cost per lot is $0.9216

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Alex_Xolod [135]

The company's break even points in unit sales is 43,000 units.

Above the actual sales volume of 42,000 units is the break-even point.

<h3>What is Break Even point?</h3>
  • In economics, business, and particularly cost accounting, the break-even point is the point at which total cost and total income are equal, or "even."
  • Although opportunity costs have been paid and capital has received the risk-adjusted, projected return, there is no net loss or gain, and one has "broken even."
  • A graph with a function that represents the fixed costs is also helpful.
  • No matter how many units are manufactured, the fixed cost is always 1200, hence the fixed costs function is shown as a horizontal line (FC = 1200).
  • Any of the following will raise the break-even point: an increase in the quantity of fixed charges or expenses for the business.
  • An increase in variable expenditures and expenses per unit. A drop in the selling prices offered by the company.

Learn more about break even point here:

brainly.com/question/14980499

#SPJ4

5 0
1 year ago
Faye works as an administrator and receptionist for Garage Door Store. The store withholds federal taxes from Faye's pay, and co
anastassius [24]

Answer:

c. ​an employee and agent.

Explanation:

Based on the information provided within the question it can be said that with respect to sales at those locations homer is both an employee and agent. This is because he works for a company, therefore making him an employee. But at the same time he is authorized to act on behalf of Garage Door therefore making him an agent.

4 0
3 years ago
Donna has a home currently worth $142,000, for which she still owes $63,000 on her mortgage. She has $18,000 in student loan deb
Elan Coil [88]

Answer:

$49,000

Explanation:

Donna's net worth is the total value of her assets minus the total value of her liabilities.

Donna's total assets = $142,000 + $1,000 = $143,000

Donna's total liabilities = $63,000 + $18,000 + $13,000 = $94,000

Donna's net worth = $143,000 - $94,000 = $49,000

8 0
3 years ago
On January 1, 2021, the Excel Delivery Company purchased a delivery van for $111,000. At the end of its five-year service life,
sveta [45]

Answer:

Annual depreciation = $44,400

Explanation:

Given,

Purchase price of the delivery van = $111,000

Salvage value = $11,400

Useful Life = 5 years

We know that

annual depreciation under double declining balance (%) = (100%/useful life)*2

Putting the value in the formula, Annual depreciation (%) =   (100%/5)*2

                                                                                               = 40%

Annual depreciation = Purchase Price*Percentage of annual depreciation

Annual depreciation = $111,000*40% = $44,400

6 0
3 years ago
In the short run a) a firm does not have sufficient time to change any of the resources it uses. b) a firm does not have suffici
timama [110]

Answer:

c) a firm does not have sufficient time to change the level of use some of its inputs.

Explanation:

The definition of short-run in economics is not a term to be used for a specific certain period of time but it means that the period of time is too short that the firms cannot change the level they are using of some of their inputs or costs. It means they do have fixed costs they cannot change. For example, all machinery installed, a yearly rent paid, electricity or others that the firm cannot change unless there is sufficient time. In a short period of time, it will have those costs anyway. The firm cannot change the level of that input. And it is short run of at least one input. It may be many. But it is not necessary to have all inputs unchanged to consider that period of time as short-run.

However, firms can change level of inputs if they have more time. That is cost the long run. All costs are variable costs when we are in long run.

3 0
3 years ago
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