Answer: $5,440
Explanation:
When using the percent of sales method to determine bad debts, the company estimates a percentage that it believes will results in uncollectible debt and then applies it to the sales/revenue figure. The figure that is calculated is then debited along with the debit balance on the Allowance for doubtful accounts to the Bad debts account for the year and credited to the Allowance for doubtful accounts.
This company estimates that they will have 0.6% of credit sales uncollectible.
There are also $790,000 in sales of which all are on credit.
The Uncollectible estimate is therefore,
= 790,000 * 0.6%
= $4,740
This figure is then added to the debit amount on the Allowance for Uncollectible Accounts.
= 4,470 + 700
= $5,440
Note; A debit balance on the Allowance for doubtful debt account signifies that the bad debts were higher than anticipated the last time. This is why the figure is added to the current bad debts expense.
Answer:
(Q, R) = (1555, 1400)
shortage imputed = $0.388
Explanation:
Lot size-reorder point system is one of the multi period models. This system is denoted by decision variables (Q, R). This multi period model is implemented when there is uncertain demand in inventory control.
nevertheless, in the simple EOQ model, demand is known and fixed. But when the demand is random, these lot size-reorder point (Q, R) systems allow random demand.
There are two decision variables in a (Q, R) system:
Order quantity, Q and
Reorder point, R
Additional steps are attached as files
Answer:
below
Explanation:
<h2><u>Multiple choice </u></h2>
If a college sets its tuition<u> below</u> the equilibrium tuition, then it will have to use some form of non price-rationing device to determine who will be accepted for admission to the college.
Answer:
a) 10
b) 85
Explanation:
a)
The safety stock is gotten by multiplying the standard deviation with the appropriate z value (demand and service level).
THe z coefficient of service level of 95% is 1.64
So we multiply the SD (standard deviation) with 1.64
Safety Stock = 6 * 1.64 = 9.84 = 10
b)
Now, the reorder point.
Reorder Point = Lead Time Demand + Safety Stock
It is already given that Lead TIme Demand is 75 and we found Safety Stock to be 10, so:
Reorder Point = 75 + 10 = 85
