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Elena L [17]
3 years ago
5

We need 25000 units per year. Two suppliers for those units have provided us their quotes. The order cost is $300 per order and

holding cost is $30 per unit per month. a.) What is the economic order quantity

Business
1 answer:
IrinaK [193]3 years ago
4 0

Answer:

EOQ = 204.124 rounded off to 204 units

Explanation:

The EOQ or economic order quantity is the optimal order quantity that a company should order every time in order to minimize the inventory related costs such as holding, ordering and shortage/stock out costs. The formula o calculate EOQ is attached.

Holding cost per unit per annum = 30 * 12 = $360

EOQ = √(2 * 25000 * 300) / 360

EOQ = 204.124 rounded off to 204 units

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2) A firm sells two products. Product R sells for $20; its variable cost is $6. Product S sells for $50; its variable cost is $3
Tom [10]

Answer:

$6896551.7

Explanation:

Given the following :

Product R:

Selling price = $20

Variable cost = $6

Product S:

Selling price = $50

Variable cost = $30

Firm's fixed cost = $4, 000,000

Break-even point dollars = (Fixed cost /Contribution margin ratio)

Contribution margin : selling price - variable cost

Product R: $(20 - 6) = $14

Contribution margin ratio = ($14/$20) * 60% = 0.42

Product S: $(50 - 30) = $20

Contribution margin ratio = ($20/$50) * 40% = 0.16

Sum of contribution margin ratio for both products = (0.42 + 0.16) = 0.58

Break-even point dollars = (Fixed cost /sum of Contribution margin ratio)

= $4,000,000/0.58

= $6896551.7

3 0
3 years ago
Name 3 outside financing sources
sukhopar [10]

Answer and explanation:

In the corporate world, outside or external financing resources refer to all the sources from where a business can obtain the necessary capital to handle its operations without using the firm's assets. Common examples of external financing resources are:

  • Venture Capitals:<em> funding performed at an initial stage of companies after making research on the market and the company. </em>
  • Term loans:<em> provided by financial institutions that profit from the interest rate established in the loan or assets as collateral in case of payment failure. </em>
  • Debt Factoring:<em> short-term financing in which an organization sells its account receivables at a discount.</em>
6 0
3 years ago
At the present time, Water and Power Company (WPC) has 10-year noncallable bonds with a face value of $1,000 that are outstandin
ArbitrLikvidat [17]

Answer:

d. 2.94%

Explanation:

First, Calculate the Yield to maturity of the bond using the following formula

Use the following formula to calculate the YTM

P = [ C x ( 1 - ( 1 + r )^-n ) / r ] + [ F / ( 1 + r )^n ]

Where

F = Face value = $1,000

P = Price = $1,495.56

C = Coupon payment = Face value x Coupon rate = $1,000 x 10% = $100

n = numbers of periods = Numbers of years to maturity = 10 years

r = YTM = ?

Placing values in the formula

$1,495.56 = [ $100 x ( 1 - ( 1 + r )^-10 ) / r ] + [ $1,000 / ( 1 + r )^10 ]

r = 3.916%

Now calculate the after-tax cost of debt

After-tax cost of debt = YTM x ( 1 - Tax rate )

After-tax cost of debt = 3.916% x ( 1 - 25% )

After-tax cost of debt = 2.937%

After-tax cost of debt = 2.94%

4 0
2 years ago
ay-Zee Company makes an in-car navigation system. Next year, Jay-Zee plans to sell 23,000 units at a price of $350 each. Product
Fittoniya [83]

Answer:

$21

Explanation:

The computation of the sales commission per unit sold is shown below:

= Selling price per unit × sales commission percentage

= $350 × 6%

= $21

By multiplying the selling price per unit with the sales commission percentage we can get the sales commission per unit and the same is shown above in the calculation part.

All other information is not relevant. Hence, ignored it

3 0
3 years ago
Shmenson Company uses the periodic inventory system. Sales for 2020 were $470,000 while operating expenses were $175,000. Beginn
jeka94

Answer:

The net income  for 2020 was $90,000

Explanation:

Shmenson Company

Income Statement for the year ended 2020

Sales                                                                             $470,000

Less Cost of Sales

Beginning Inventories                           $70,000

Add Net purchases                              $180,000

Add Freight In                                         $15,000

Less Ending Inventories                      ($60,000)     ($205,000)

Gross Profit                                                                  $265,000

Less Expenses

Operating expenses                                                   ($175,000)

Net Income                                                                    $90,000

Conclusion

Thus, the net income  for 2020 was $90,000.

8 0
2 years ago
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