Answer:
The answer is the economic order quantity is 400 units.
Explanation:
For this question, we apply the economic order quantity (EOQ) formula developed by Ford W. Harris in 1913, to find the answer. The formula is shown as below:
EOQ = 
in which: EOQ: Economic order quantity; D: Annual Demand in units; S: Cost per order; H: Annual holding cost per unit.
So by substituting the information we are given in the question, we have: D = 1,200 units; S = $80 and H = $1.2. Thus:
EOQ = 
= 400 units.
So, the economic order quantity is 400 units.
Answer:
The answer is below
Explanation:
a. Fee paid to factory representative for installation - DEBITED to Asset account
b. Freight - DEBITED to Asset account
c. Insurance while in transit - DEBITED to Asset account
d. New parts to replace those damaged in unloading - NOT DEBITED to Asset account
To understand which costs incurred in acquiring the new printing press should be debited to the asset account, it should be noted that "new parts to replace those damaged in unloading" does not lead to improvement in assets, hence, it should be considered as Expense instead of being devoted into the asset account.
Answer:
1) The fixed overhead production-volume variance is $14400 favourable.
2) The fixed overhead spending variance is $9000 unfavourable.
Explanation:
1)
Fixed overhead production volume variance
= amount applied * amount budgeted
= 144000/30000
= 4.80 per unit
= 4.80*33000 - 144000
= $14400 favourable
Therefore, The fixed overhead production-volume variance is $14400 favourable.
2)
fixed overhead spending variance
= actual overhead - budgeted overhead
= 153000 - 144000
= $9000 unfavourable
Therefore, The fixed overhead spending variance is $9000 unfavourable.
