Answer: D. 500
Explanation:
The Economic Order Quantity (EOQ) refers to an efficient number of units that a company should order to minimize the total costs of inventory such as holding costs, order costs, and shortage costs.
It is calculated by the formula below,
EOQ = √ (2 * Annual demand * Ordering Cost / Holding Cost)
EOQ = √ (2 * 5,000 * 250 /10)
EOQ = 500 units.
The economic ordering quantity (EOQ) for this item is 500 units.
Answer:
increase
Explanation:
Break-even point is used to determine the minimum number of units a business needs to sell in order to fully cover the fixed costs. The break-even formula is below;
Break-even = Fixed cost / (Sale price - Variable cost)
If sales price (SP) decreases while keeping other factors; variable cost(VC) and fixed cost(FC) constant, the denominator amount will be smaller, making the break- even point to increase.
Answer:
Explanation:
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FIFO stands for First In First Out and LIFO stands for Last In First Out.
Answer: LIFO produces more favorable cash flow because LIFO PRODUCES LOWER INCOME TAX EXPENSE.
During inflation, LIFO approach is adopted for tax benefits. With the rise in prices, LIFO produces higher cost of sold amounts of goods.
Answer:
C.$5,000.
Explanation:
November 1, 2013
Amount of Loan = $500,000
As the Interest is payable at maturity, at December 31, 2013 only one month of interest expense is accrued, which is not paid, Following Journal entry will be passed tor record the interest expense.
Dr. Interest Expense $2,500
Cr. Interest Payable on Note $2,500
Interest Expense = $500,000 x 6% x 2/12 = $5,000
