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Orlov [11]
3 years ago
9

R. C. Barker makes purchasing decisions for his company. One product that he buys costs $50 per unit when the order quantity is

less than 500. When the quantity ordered is 500 or more, the price per unit drops to $48. The ordering cost is $30 per order and the annual demand is 7,500 units. The holding cost is 10 percent of the purchase cost. If R. C. orders 500 units each time he places an order, what would the total annual holding cost be
Business
1 answer:
aleksandrvk [35]3 years ago
6 0

Answer:

$1,200

Explanation:

total annual holding cost = average number of units in inventory x annual holding cost per unit

  • average number of units in inventory = 500 units / 2 = 250 units
  • annual holding cost per unit = $48 x 10% = $4.8

total annual holding cost = $4.80 x 250 units = $1,200

Total annual holding cost per unit includes all the costs associated to keeping a certain inventory level, e.g. warehouse costs like rent and utilities, salaries of hte employees that work in the warehouse, insurance, etc.

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To determined the profit is being maximized, you need to make sure that the difference between the total revenue and total cost is greatest. So the formula we need to use in determining the maximized profit is

Profit = Total Revenue - Total Cost

Given

 TR = $5
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Solution

Profit = 5 - 4.10
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3 years ago
"in year 1, costello company performed $14,000 of services for a customer who paid immediately. it also incurred $6,000 of wage
valina [46]

Answer: revenue of $14,000 and expense of $6,000 in Year 1.

Explanation:

In accrual accounting, it should be noted that for this accounting method, the revenue or expenses that are made by the individual or company will be recorded as at the time that the transaction took place and not when the payment for the transaction was gotten.

Since Costello company performed $14,000 of services and also incurred $6,000 of wage expenses, then Costello will report revenue of $14,000 and expense of $6,000 in Year 1.

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3 years ago
What caused consumer prices to rise following the war? . a.low demand and a surplus of produced goods . b.low demand and a short
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High demand and a shortage of produced goods
4 0
3 years ago
Read 2 more answers
What do some unethical job candidates do to alter their employment dates? List how many weeks instead of months that they worked
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4 0
3 years ago
Your Company makes and sells a single product. Each unit sells for $32 dollars and has a unit variable cost of $20. The company
andre [41]

Answer:

Your Company

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= $18,000.

Explanation:

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Variable cost per unit = $20

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Contribution margin =   $552,000 (46,000 * $12)

Cash Budget

For the month of November

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Total cash collections =   1,472,000

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Cash to borrow                     18,000 ($75,000 - $57,000)

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