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Alja [10]
3 years ago
8

A product whose EOQ is 40 units experiences a decrease in ordering cost from $90 per order to $10 per order. The revised EOQ is:

three times as large. one-third as large. nine times as large. one-ninth as large. cannot be determined
Business
1 answer:
ruslelena [56]3 years ago
4 0

Answer: three times as large

Explanation:

Economic order quantity will be calculated as follows:

EOQ = ✓(2DS/H)

D = Demand in units

Here S = Ordering cost = $10

H = Holding cost

Since S = $10

Therefore, EOQ will be:

= ✓(2DS/H)

= ✓(2 × 10 × D/ H)

= ✓(20D/H)

Since we're to increase the order cost from $10 per order to $90 per order, then EOQ will be:

Since S = $90

Therefore, EOQ will be:

= ✓(2DS/H)

= ✓(2 × 90 × D/ H)

= ✓(180D/H)

3✓20DH

The revised EOQ will then be 3 times as large.

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MOSS COMPANY
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Answer:

Net cash flow from the operating activities is 69,950

Explanation:

                                   MOSS COMPANY

                   Cash flow from operating activities  

Net income                                                  $6,600

Adjustments to reconcile net income

to operating cash flow  

Depreciation expense               $50,000

Decrease account receivable   $14,000

(46,000 - 32,000)

Increase inventory                     -$11,500

( 55,500 - 67,000)

Increase account payable         $11,700

(44,400 - 32,700)

Decrease income tax payable   <u>-$850</u>

(2,750 - 3,600)

                                                    $63,350    $<u>63,350</u>

Net cash flow from operating activities     <u>69,950 </u>

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