Companies HD and LD have the same tax rate, sales, total assets, and basic earnings power. Both companies have positive net inco
2 answers:
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Answer:
1. 4,000 bags
2. 1,000
3. 180 runs
4. 18,000
5. $165,600
Explanation:
1.
Q =
= 4,000 bags
2.
Maximum Inventory = Q* (1 - D/N/P)
4,000*0.25
= 1,000
3.
Annual demand / Bags of coffee roasted per day
36,000 bags / 200 bags
= 180 runs
4.
Annual average inventory
36,000/2
=18,000
5.
Production Cost $200 * 180 runs = $36,000
Carrying Cost $3.6 * 36,000 bags = $129,600
Total Cost = $36,000 + $129,600
= $165,600