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Ne4ueva [31]
3 years ago
7

Tammi’s Truck Stop sells Seat-o-Nails cushions, which are specially designed to keep drivers awake on the road. Her accessories

supplier makes deliveries every Tuesday, at which times she can get as many cushions as she wants (the supplier’s truck carries a large number of cushions). The cushions cost $40 wholesale, and Tammi sells them for $65. She also uses a 35 percent interest rate to evaluate the cost of holding inventory. Today it is Tuesday, Tammi has 12 cushions in stock, and the supplier has just arrived. Assuming that the weekly demand is normally distributed with mean 35 and standard deviation 10, answer the questions below. (hint: use newsvendor model)How many cushions should Tammi buy if sales are lost when she runs out of stock during the week?Reconsider part (a) if unmet demand is not lost but it is back ordered, and it costs Tammi $12 to mail the cushion to the customer.
Business
1 answer:
adell [148]3 years ago
3 0

Answer:

Explanation:

(a) The cost of underage(Cu) will be the opportunity cost for lost sales which will be:

= 65 - 40

= 25

The cost of overage(Co) will be the holding cost which will be:

= 40 x 35%/52

= 40 × 0.35/52

= 40 × 0.0067308

= 0.269

The Critical ratio will be:

= Cu/(Cu + Co)

= 25/(0.269+25)

= 0.9894

For the optimal condition,

F(z) = Critical ratio = 0.9894,

therefore, z = normsinv (0.9894) = 2.30

Therefore, the optimal stock will be calculated as:

= Mean demand + (z × Stdev)

= 35 + (2.30 × 10)

= 35 + 23

= 58 units.

We should note that Tammi already has 12 cushions in stock, therefore the order quantity will be:

= 58 - 12

= 46 units

(b) Cu = 12

Co = 0.269

Critical ratio will be:

= Cu/(Co + Cu)

= 12 / (12 + 0.269)

= 0.9781

Therefore, z = normsinv(0.9781) = 2.0

Then, the optimal stock will be:

= 35 + (2.0 × 10)

= 35+20

= 55 units

We should note that Tammi already has 12 cushions in stock, therefore the order quantity will be:

= 55 - 12

= 43 units

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Misha Larkins [42]

Answer:

Medium of exchange

Explanation:

Fresh fish is not an effective form of money. Fresh fish lacks medium of exchange, which makes it ineffective.

4 0
3 years ago
Which of the following statements is FALSE?
soldi70 [24.7K]

Answer: The following statements is false: <u><em>Mutual aid and assistance arrangements and Memorandums of Understanding (MOUs) cannot be used for supplementing incident staff.</em></u>

The above statement is wrong since mutual aid, assistance arrangements and memorandums of understanding can be used for supplementing incident staff.

<u><em>Therefore, the correct option is (c).</em></u>

8 0
3 years ago
If manufacturing overhead has been underallocated during the period, then which of the following is true?(a) the jobs produced d
Alecsey [184]

Answer:

The correct answer is B: the jobs produced during the period have been under-costed

Explanation:

Giving the following information:

If manufacturing overhead has been under-allocated during the period, then which of the following is true?

(a) the jobs produced during the period have been over-costed

(b) the jobs produced during the period have been under-costed

(c) the jobs produced during the period have been costed correctly

(d) none of the above

When manufacturing overhead has been under-allocated means that the actual costs incurred where superior that the estimated cost for the period.

7 0
3 years ago
The Marshall Company has a process cost system. All materials are added when the process is first begun. At the beginning of Sep
Mademuasel [1]

Answer:

c) 48,000 units

Explanation:

The question is to compute the equivalent units of materials in September for Marshall Company

It is computed as follows:

1) Beginning Equivalent Unit

At the beginning, Units = 0, Percent completed = 0 and Equivalent unit= $0

Equivalent Units  Started ad Completed

2) Started Units= 50,000 units

Units still in process at the end of September = 5000 units

Started and Completed = 50,000 - 5,000 = 45,000

Since the Units completed is 45,000, it means 100% completed equivalent unit is 45,000

3) Closing Equivalent Units

In process = 5,000 units and percent completed is 3/5

Equivalent unit is 3/5 x 5000 = 3000 units

Finally, total equivalent units  for conversion costs in September

= 0 + 45,000 + 3,000

=48,000 units

4 0
3 years ago
Westford Corporation has $185 million dollars of interest-bearing debt outstanding at the end of fiscal 2014 year. In addition,
Ratling [72]

Answer:

B) 9.1%

Explanation:

Cost of debt is the interest rate paid by a company due to borrowing money; i.e  debt from investors.

$185million in debt is the face value of debt that Westford Corporation had and the $26 million dollars of interest expense is the cost of the debt in dollars;

First, find pretax cost of debt ;

Pretax cost of debt = (Interest expense / Face value of debt )*100

= (26,000,000/ 185,000,000 )*100

=0.1405 *100

= 14.05%

Next, use pretax cost of debt to find after-tax cost of debt;

After-tax cost of debt = Pretax cost of debt (1-tax)

= 14.05% *(1-0.35)

= 9.13%

Therefore, Westford's cost of debt capital is 9.1%

6 0
3 years ago
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