Answer:
= $132,000.
Explanation:
There are two types of fixed costs, general fixed cost and specific fixed cost.
<u><em>General fixed costs </em></u><em>are those that cannot be traced to a specific product rather they are incurred for the benefit of all of the product being produced. For example,the rent of the factory where three products are being produced</em>
So they are unavoidable should a product be ceased for production that is they would still be incurred either way.
<u>S</u><u><em>pecific fixed costs </em></u><em>are those incurred specifically for a particular product and as such they would be saved should the product be discontinued. For example , if a special machine that cost $4000 a month to rent is used to produce a product. The $4000 would be saved should the production of the product ceases</em>
The net operating cost of the company would increase by the amount of the avoidable specific fixed cost:
=$90,000 + $42,000
= $132,000.
Answer:
The optimal order quantity is 6
Explanation:
Please see attachment
Answer:
The project A has a smaller IRR, and the project B is more attractive
Explanation:
Solution
Solve for Project A:
Now,
Let assume that the IRR be x
Hence,
The Present Value of Outflows of Cash Outflows= The Present Value of Inflows of Cash
Thus,
2000 =500/(1.0x) +500/ (1.0x)^2 +1200/(1.0x)^3
Or we say x= 4.223%
Therefore the IRR is 4.223%
For project B:
Let assume that the IRR be y.
Thus,
The Present Value of Outflow of Cash = The Present Value of Inflow of Cash
so,
2000 =600/(1.0y) + 600/ (1.0y)^2 + 1000/(1.0y)^3
Or we say, y= 4.498%
Therefore the IRR is 4.498%
Answer:
Stock out costs increase
Carrying costs decrease
Explanation:
Just in time (JIT) decreases total inventory and increases the number of deliveries made by the company's vendors.
Since the company is going to hold fewer materials and components, then the risk of an stock out increases, resulting in higher stock out costs.
The total inventory will decrease, therefore, the carrying costs will also decrease.
<span>One is confidentiality which means only authorized people are allowed to view the information. Another is integrity, which ensures the information is correct and that nothing has changed the data. For example malicious software or an unauthorized person. Lastly, availability which ensures the data is available and able to be accessed by authorized users.</span>
