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Softa [21]
3 years ago
9

15 stores and their distribution warehouse. The Paint Supply Store franchise sells an average of 70 gallons of Purple Paint ever

y week (for 52 weeks per year). Their current policy is that when they place an order for Purple Paint from their supplier, they order 90 gallons at a price of $4.00 per gallon. [The company does not hold Safety Stock] It takes 2.50 weeks to receive an order from the supplier. Administrative costs for Ordering paint have been estimated to be $35 per order. Holding Costs = 40% of the purchase price per gallon per year. What is the Total Annual Inventory Cost for the company's current policy?
Business
1 answer:
erastova [34]3 years ago
4 0

Answer: $1,487.56

Explanation:

Total annual inventory cost = Ordering cost + Inventory Holding cost

Ordering cost = Number of orders * ordering cost

= (Annual demand / Order quantity) * 35

= ((52 weeks per year * 70) / 90) * 35

= $1,415.56

Inventory holding cost:

= Average inventory * holding cost

= (90 gallons / 2) * (40% * 4)

= $72

Total annual inventory cost = 1,415.56 + 36

= $1,487.56

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Suppose you know a company's stock currently sells for $90 per share and the required return on the stock is 9 percent. You also
steposvetlana [31]

Answer:

$3.72

Explanation:

in order to determine the price of the stock we use the dividend discount model:

P₀ = Div₁ / (Re - g)

  • P₀ = $90
  • Div₁ = ?
  • Re = 9%
  • g = 9% / 2 = 4.5%

Div₁ = P₀ x (Re - g)

Div₁ = $90 x (9% - 4.5%) = $90 x 4.5% = $4.05

now the current dividend (Div₀) = Div₁ / (1 + Re) = $4.05 / (1 + 9%) = $4.05 / 1.09 = $3.7156 = $3.72

7 0
2 years ago
Assume milk is used to produce ice cream. Ceteris paribus, a decrease in the price of milk will cause the equilibrium price of i
MariettaO [177]

Answer:

Fall

Explanation:

Milk is an input in the production of milk.

decrease in the price of milk would increase the production of icecream.

An increase in production would lead to an increase in supply of milk.

When supply exceeds demand, equilibrium price drops.

I hope my answer helps you

5 0
2 years ago
How can formal business documents help managers solve problems?
REY [17]

the correct answer is b

7 0
3 years ago
Read 2 more answers
A year​ ago, the Really Big Growth Fund was being quoted at an NAV of ​$22.28 and an offer price of ​$23.45. ​Today, it's being
Crank

Answer:

9.85%

Explanation:

Data provided in the question:

Initial Offer price = ​$23.45

Current NAV = ​$22.28

Dividends and capital gains distributions over the year  = $1.09 per​ share

Now,

Holding period return

= [Current NAV + Dividends and capital gains distributions - Initial Offer price ] ÷ Initial Offer price

= [ $24.67 + $1.09 - $23.45 ] ÷ $23.45

= $2.31 ÷ $23.45

= 0.0985

or

= 0.0985 × 100%

= 9.85%

4 0
2 years ago
Shasta Fixture Company manufactures faucets in a small manufacturing facility. The faucets are made from brass. Manufacturing ha
k0ka [10]

Answer:

a. Determine the standard cost per unit for direct materials and direct labor.

standard direct labor rate = $20 x 30/60 minutes = $10 per faucet

standard direct materials rate = $1.80 x 2.5 lbs = $4.50 per faucet

b. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance.

direct materials price variance = (actual price x actual quantity) - (standard price x actual quantity) = ($1.95 x 13,000) - ($1.80 x 12,500) = $25,350 - $22,500 = $2,850 UNFAVORABLE

direct materials quantity variance = (standard price x actual quantity) -(standard price x standard quantity) = ($1.80 x 13,000) - ($1.80 x 12,500) = $23,400 - $22,500 = $900 UNFAVORABLE

total direct materials variance = direct materials price variance + direct materials quantity variance = $2,850 + $900 = $3,750 UNFAVORABLE

8 0
3 years ago
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