Answer:
The correct answer is B
Explanation:
Holding inventory is the term which is defined as the costs which is linked with storing or keeping the inventory that remains unsold with the seller. These costs are one of the vital component of the aggregate inventory costs, along with the shortage costs and the ordering costs.
The reason for holding the inventory could be require protection from uncertainties, enable the firm in accomplishing the economies of scale, act as buffer among the channel of distribution and critical interfaces and enable the specialization in production.
Answer:
The correct answer is:
$80,500 (b.)
Explanation:
First of all, not that total anticipated October sales is the same thing as projected October sales. Therefore, this sale is calculated as follows:
Projected sales = 7,000
unit price = $11.50 per unit
Therefore
Price for 7,000 units = 11.5 × 7,000 = $80,500
To see what they can build on or reconstruct.
Answer:
Given:
Demand = 15,000
Initial investment = $256,000
Variable cost = $15
Selling price = $30
Here, we'll first compute break-even quantity :
i.e. ![Initial \: investment + variable \: cost \times Quantity_{break\:even} = Quantity_{break\:even} \times selling price](https://tex.z-dn.net/?f=Initial%20%5C%3A%20investment%20%2B%20variable%20%5C%3A%20cost%20%5Ctimes%20Quantity_%7Bbreak%5C%3Aeven%7D%20%3D%20Quantity_%7Bbreak%5C%3Aeven%7D%20%5Ctimes%20selling%20price)
![256,000 + 15 \times Quantity_{break\:even} = Quantity_{break\:even} \times 30](https://tex.z-dn.net/?f=%20256%2C000%20%2B%2015%20%5Ctimes%20Quantity_%7Bbreak%5C%3Aeven%7D%20%3D%20Quantity_%7Bbreak%5C%3Aeven%7D%20%5Ctimes%2030%20)
![Quantity_{break\:even} = 17,067 units](https://tex.z-dn.net/?f=Quantity_%7Bbreak%5C%3Aeven%7D%20%3D%2017%2C067%20units)
From above we can state that the demand is less than break-even quantity i.e. in this case the organization will not be able to recover the investment made.
<u><em>Therefore, the company's total margin will be less than its investment. </em></u>
<u><em>The correct option is (b)</em></u>