Ask question

Ask question

All categories

marishachu [46]

3 years ago

12

Eternal City operates several theme parks throughout the western United States and uses 30,000 gallons of machine oil on an annu

al basis. The parks operate 50 weeks per year and are considering 2 suppliers of oil, Sharps LTD and Winkler LLC. Sharps Price per unit is $4.00 and Winkler is $3.80. Sharps annual holding cost is $0.80 per unit and Winkler is $0.76. Sharps lead time is 4 weeks, Winkler is 6 weeks. Sharps admin costs are $4,000 and Winkler is $5,000 Annual Freight Costs Supplier 5,000 10,000 15,000 Sharps $5,000 $2,600 $2,000 Winkler $5,500 $3,200 $2,900 What are total annual costs given a shipment quantity of 5,000 gallons from Sharps? a. $139,230 b. $261,220 c. $456,000 d. $132,920 e. $139,220

1 answer:

lyudmila [28]3 years ago

6 0

Answer:

$132,920

Explanation:

Annual demand D = 30,000

Order quantity Q = 5,000

Annual holding cost per unit H = $0.80

Annual holding cost = (Q/2)*H

Annual holding cost = (5,000/2)*$0.80

Annual holding cost = 2,500 * $0.80

Annual holding cost = $2,000

Annual shipping cost = $5,000

Unit cost = $4.00

Annual admin cost = $4,000

Lead time cost = (Lead Time*H*D)/Weeks per year

Lead time cost = 4*$0.80*30,000/ 50

Lead time cost = $1,920

Cost of product = Unit cost * D

Cost of product = $4 * 30,000

Cost of product = $120,000

Total cost = Total order cost + Holding cost + Admins cost + Cost of product + LT cost

Total cost = $5,000 + $2,000 + $4,000 + $120,000 + $1,920

Total cost = $132,920

Thus, the total annual costs given a shipment quantity of 5,000 gallons from Sharps is $132,920

You might be interested in

After evaluating Null Company’s manufacturing process, management decides to establish standards of 2 hours of direct labor per

Arisa [49]

Answer:

Explanation:

The computation is shown below:

For October month:

The computation of the direct labor price variance is shown below:

= Actual Hours × (Actual rate - standard rate)

= 11,500 × ($180,550 ÷ 11,500 hours - $15.50 per hour)

= 11,500 × ($15.70 - $15.50)

= $2,300 unfavorable

The computation of the direct labor efficiency variance is shown below:

= Standard Rate × (Actual hours - Standard hours)

= $15.50 per hour × (11,500 hours - 6,100 units × 2 hours)

= $15.50 per hour × 700 hours

= $10,850 favorable

The computation of the total direct labor cost variance is shown below:

= Direct labor rate variance + direct labor efficiency variance

= $2,300 unfavorable + $10,850 favorable

= $8,550 favorable

For November month:

The computation of the direct labor price variance is shown below:

= Actual Hours × (Actual rate - standard rate)

= 22,500 × ($355,500 ÷ 22,500 hours - $15.50 per hour)

= 22,500 × ($15.80 - $15.50)

= $6,750 unfavorable

The computation of the direct labor efficiency variance is shown below:

= Standard Rate × (Actual hours - Standard hours)

= $15.50 per hour × (22,500 hours - 6,500 units × 2 hours)

= $15.50 per hour × 9,500 hours

= $147,250 favorable

The computation of the total direct labor cost variance is shown below:

= Direct labor rate variance + direct labor efficiency variance

= $6,750 unfavorable + $147,250 favorable

= $140,500 favorable

3 0

3 years ago

When preparing a journal entry for a transaction that affects retained earnings, the "Retained Earnings" account should not be d

yarga [219]

Answer:

True

Explanation:

Retained earnings are the net earnings of an entity accumulated over time after payment of dividend. It is that part of earnings that is retain for expansion by the entity.

Generally, retained earnings are not changed by direct posting except it is prior year adjustment. in some entities, the amount that is transferred to retained earnings is system generated. Most transactions that affect retained earnings are debited or credited to account which ultimately affects retained earnings

4 0

3 years ago

Linda loves buying shoes and going out to dance. Her utility function for pairs of shoes, S, and the number of times she goes d

padilas [110]

Answer:

See Explanation

Explanation:

Given

$U(S,T) = 2ST$

$M_U_S =2T$

$M_U_T=2S$

The following details are omitted from the question

$P_S= \$50$ --- Price of the Shoes

$P_T = \$50$ --- Spent on dancing

$B = \$500$ --- Budget on shoe and dancing

Solving (a): Her budget line

First, we determine her budget equation (B).

This is calculated by:

$B = P_S * S + P_T *T$

This gives:

$500 = 50 * S + 50 * T$

$500 = 50 S + 50 T$

Divide through by 50

$10 =S + T$

$S + T = 10$ --- The budget equation

<em>See attachment for the budget line equation</em>

Solving (a): Optimal Consumption Bundle Point

First, we determine the marginal rate of substitution (MRS) using:

$MRS = \frac{MU_s}{MU_t} = 1$

$MRS = \frac{2S}{2T} =1$

This implies that:

$\frac{2S}{2T} = 1$

Cross Multiply

$2S = 2T * 1$

$2S = 2T$

Divide by 2

$S = T$

Substitute T for S in the budget equation

$T + T= 10$

$2T = 10$

$T=5$

Recall that:

$S = T$

$S = 5$

So, the point if optimal consumption bundle is (5,5)

<em>See attachment for point R</em>

5 0

3 years ago

A company's bank statement balance is $ 3,400 and shows a service charge of $ 12, interest earned of $ 7, and an NSF check fo

BigorU [14]

Answer:

a. $3,725

b. $3,945

Explanation:

a. The computation of the adjusted cash balance is shown below:

= Bank statement balance + Deposits in transit - outstanding checks

= $3,400 + $1,000 - $675

= $3,725

b. The computation of the book balance of cash before the reconciliation is shown below:

= Adjusted cash balance + service charge + NSF checks - interest earned - recording error

= $3,725 + $12 + $240 - $7 - $25

= $3,945

7 0

2 years ago

Governments normally are concerned when their country is running a surplus on the current account of their balance of payments.

lutik1710 [3]

True because they really care about it so as for inflation and deflation not to fall in

3 0

3 years ago