Compute the dollar amount of working capital that can be reduced at year-end if the ending heel raw material inventory is cut by
1 answer:
Answer:
Note: The full question is attached as picture below
a. No of units Cost per unit Total Cost
Beginning Inventory 1,200 $8 $9,600
Add Purchase 35,000 $8 $280,000
Inventory available for 36,200 $8 $289,600
production
Less Inventory transferred to 33,200 $8 $265,600
production (16,600 Pairs*2 Heels)
Ending Inventory 3,000 $8 $24,000
b. Working capital will be reduced by: (3,000*$8)/2 = $12,000
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C.
Allocative efficiency in simple terms basically means there is no wastage, therefore if producers produce at price equals marginal coat, they are producing at the point where consumers are willing to pay that final price. Refer to the poorly drawn diagram for reference.
Allocative efficiency in simple terms basically means there is no wastage, therefore if producers produce at price equals marginal coat, they are producing at the point where consumers are willing to pay that final price. Refer to the poorly drawn diagram for reference.