Answer:
The Hi-Stakes Company
a. If the direct exchange rate increases, the dollar strengthens relative to the other currency.
b. If the indirect exchange rate increases, the dollar also strengthens relative to the other currency.
Explanation:
When the exchange rate increases, it means that more of the other currency is required in order to embark on importing and exporting transactions. However, the increases will weaken the ability of the importing currency to afford the dollar-based goods, which have then being made more expensive.
Dong Wang wants to retire when he has saved $1,500,000. He can make 30 payments of $15,000 each, with each payment made at the beginning of the year. What would be the interest rate required to help him achieve his goal
Answer: 6.94%
Explanation:
You can use an Excel worksheet to solve for this:
Number of periods = 30
Payment = 15,000 (should be a negative number)
Present value = 0
Future value = 1,500,000
Type = 1 (this shows that it is an annuity due because payments are at the beginning of the year).
Rate = 6.94%
The model of competitive markets relies on these three core assumptions:
1. There must be many buyers and sellers-a few players can't dominate the market.
2. Firms must produce an identical product-buyers must regard all sellers' products as equivalent.
3. Firms and resources must be fully mobile, allowing for free entry into and exit from the industry.
The first two conditions imply that all consumers and firms are price takers. While the third is not necessary for price-taking behavior, assume for this problem that a market cannot maintain competition in the long run without free entry.
Identify whether or not each of the following scenarios describes a competitive market, along with the correct explanation of why or why not.
Scenario Competitive
1. Several stores in the mall sell hooded sweatshirts. Each store's sweatshirts reflect the style of that particular store. Additionally, some stores use higher-quality cotton than others, which is reflected in the apparel's prices.
2. In a small town, there are two providers of broadband Internet access: a cable company and the phone company.
The Internet access offered by both providers is of the same speed.
3. There are hundreds of high school students in need of algebra tutoring services in Dallas.
4. Dozens of companies offer tutoring services, and the parents who seek out tutors view the quality of the tutoring at the different companies to be largely the same.
5. The government has granted a patent to a pharmaceutical company for an experimental AIDS drug. That company is the only firm permitted to sell the drug.
Answer:
Following are the solution to the given points:
Explanation:
For point 1:
No, not the same thing Because the product is not the same, the marketplace is monopolistic and not completely competitive.
For point 2:
No, not a bunch of salespeople Because the product is the same any maker wishes to enter into the market, the competitive market also does not mean that only two vendors and not so many sellers present in the market.
For point 3 and 4:
Yes, it is aggressive algebra upon on market Same students and several teaching qualities everywhere.
For point 5:
No, no free admissionm, it was not a regulated business. The rationale would be that the entrance to the market via patent rights is restrained by the state.
Why is it important to test sending an electronic resume before sending it to an employer?
Answer:
To double check the formatting
Explanation:
You do this in order to double-check the formatting before the electronic resume get sent out to the employer. When the resumes is converted to this format, the text In it could be confusing to someone reading or it could be difficult to read. the best thing for you to do is to check it properly to see how the resume appears before you send it out
Chang Industries has 2,800 defective units of product that have already cost $14.80 each to produce. A salvage company will purchase the defective units as they are for $5.80 each. Chang's production manager reports that the defects can be corrected for $5.20 per unit, enabling them to be sold at their regular market price of $22.60. The incremental income or loss on reworking the units is:
Answer:
If the units are rework, income will increase by $32,480 (48,720 - 16,240).
Explanation:
Giving the following information:
The previous cost will not be taken into account, because it is constant for both options.
Number of units= 2,800
Sell as-is:
Selling price= $5.8
Re-work:
Unitary cost= $5.2
Selling price= $22.6
We need to calculate the effect on the income of both options:
Sell as-is:
Effect on income= 2,800*5.8= $16,240 increase
Re-work:
Effect on income= 2,800*(22.6 - 5,2)
Effect on income= $48,720 increase
If the units are rework, income will increase by $32,480 (48,720 - 16,240).
Shockglass Company had a beginning inventory of $15,000. During the year, the company recorded inventory purchases of $45,000 and cost of goods sold of $50,000. The ending inventory must equal: A. $10,000. B. $25,000. C. $26,000. D. $27,000.
Answer:
A. $10,000
Explanation:
We know that :
cost of goods sold = opening inventory + purchases - ending inventory
hence,
Ending Inventory = opening inventory + purchases - cost of goods sold
therefore,
Ending Inventory = $15,000 + $45,000 - $50,000
= $10,000
The ending inventory must equal: $10,000
A company has a factory that is designed so that it is most efficient (average unit cost is minimized) when producing 27,100 units of output each month. However, it has an absolute maximum output capability of 33,000 units per month, and can produce as little as 7,000 units per month without corporate headquarters shifting production to another plant. If the factory produces 17,470 units in October, what is the capacity utilization rate in October for this factory
Answer: 64.47%
Explanation:
Units produced in October = 17470
Units production in the most efficient way = 27,100
Therefore, the capacity utilization rate in October for the factory will be:
= Units produced in October / Units production in the most efficient way
= 17470 / 27100
= 0.6447
= 64.47%
The capacity utilization rate in October for this factory is 64.47%.
Cyclical unemployment arises when:______.
a. the agriculture sector completes the cycle of planting, cultivating, and harvesting the nation's food supply.
b. labor unions strike for higher wages.
c. the business cycle enters an expansionary phase.
d. business activity in the macroeconomy declines.
Answer:
D
Explanation:
types of unemployment
structural unemployment is an unemployment that occurs as a result of changes in the economy. These changes can be as a result of changes in technology, polices or competition. Structural unemployment tends to be permanent.
The geologist lost his hob permanently due to increase in wages (polices)
Frictional unemployment: the period of time a person is unemployed from the period he leaves his current job and the time he gets another job. Eg. when a real estate agent who leaves a job in Texas and searches for a similar, higher-paying job in California.
Voluntary unemployment: e.g. worker at a fast-food restaurant who quits work and attends college.
Cyclical unemployment: it occurs as a result of fluctuations in the economy. Unemployment would be high in a downturn and low in a boom
The____________________ identifies the processes entailed in the business continuity plan and/or the disaster recovery plan.
Answer:
impact analysis.
Explanation:
The missing word is impact analysis. Hope this helps.
A bond has a modified duration of 8 and a price of 112,955 calculated using an annual effective interest rate of 6.4%. EMAC is the estimated price of this bond at an interest rate of 7.0% using the first-order Macaulay approximation EMOD is the estimated price of this bond at an interest rate of 7.0% using the first-order modified approximation Calculate EC EMOD A. 91 B. 102 C. 116 D. 127 E. 143
Answer:
Option E (143) is the appropriate solution.
Explanation:
According to the question,
The modified duration will be:
= [tex]\frac{Macaulay \ duration}{(1+yield)}[/tex]
= [tex]8\times 1.064[/tex]
= [tex]8.512[/tex]
The percentage change in price will be:
= [tex]-0.6\times 8 \ percent[/tex]
= [tex]-4.8[/tex] (%)
Now,
The EMOD will be:
= [tex]112955\times (1-4.8 \ percent)[/tex]
= [tex]107533.2[/tex] ($)
Or,
The EMAC will be:
= [tex]112955\times (\frac{1.064}{1.07} )^{8.512}[/tex]
= [tex]107675.7[/tex] ($)
Hence,
⇒ [tex]EMOD-EMAC=107533.2-107675.7[/tex]
[tex]=-142.5[/tex]
⇒ [tex]EMAC-EMOD=143[/tex]
g dividends paid 13500. what was the net income for the past year of the firm faces a tax rate of 30%
Answer:
A.) £27,214.29
B.) £19,250
Step-by-step explanation:
Given the following :
Andy £13500
Bevan £27500
Cheryl £13250
Deva £75000
Elliott £18750
Frankie £27500
Grace £15000
Mean income = (total sum of salaries / number of workers)
Mean income = £(13500 + 27500 + 13250 + 75000 + 18750 + 27500 + 15000) / 7
Mean income = (£190,500 / 7) = £27,214.286
B.) mean income excluding Deva's salary:
Mean income = Mean income = £(13500 + 27500 + 13250 + 18750 + 27500 + 15000) / 7
Mean income = £115,500 / 6
Mean income = £19,250
implications of game theory
Answer:
Game Theory is a general mathematical analysis to investigate the strategic interactions among players. Game theorists attempt to provide precise descriptions of situations of conflicting interests in order to study the behavior that such a conflict would (or, in some cases, should) elicit from rational agents. Players are assumed to consider the position and perceptions of other players while forming their strategies. In our examples, we will assume that there are two players, and that each has two choices and the fact that the players are selfish (operate in their own best interests) and rational .
Limitations of Game Theory :
The biggest issue with game theory is that, like most other economic models, it relies on the assumption that people are rational actors that are self-interested and utility-maximizing. Of course, we are social beings who do cooperate and do care about the welfare of others, often at our own expense. Game theory cannot account for the fact that in some situations we may fall into a Nash equilibrium, and other times not, depending on the social context and who the players are.
A company had cash sales of $49,527, credit sales of $38,540, sales returns and allowances of $7,100 and sales discounts of $4,375. The company's net sales for this period equals what? (I added cash sales and credit sales. Then I subtracted sales returns and allowances and sales discounts. Not sure if my calculations are correct.) Please explain your answers.
Answer:
The company's net sales for this period equal to $76,592
Explanation:
First we need to calculate the total sales using the following formula
Total Sales = Cash Sales + Credit sales
Where
Cash Sales = $49,527
Credit sales = $38,540
Placing values in the formula
Total Sales = $49,527 + $38,540
Total Sales = $88,067
Now use the following formula to calculate the net sales
Net Sales = Total Sales - Sales returns and allowances - Sales discount
Where
Total Sales = $88,067
Sales returns and allowances = $7,100
Sales discount = $4,375
Placing values in the formula
Net Sales = $88,067 - $7,100 - $4,375
Net Sales = $76,592
A skilled carpenter installed a roof on a new administrative building for a private not-for-profit free of charge. The not-for-profit would have had to pay $2,300 for this service if not donated. What entry should the not-for-profit make
Answer and Explanation:
The journal entry should the not for profit make is given below;
Capital Expenditures $2,300
Contribution revenue $2,300
(Being the capital expenditure is recorded)
here the capital expenditure is debited as it increased the expenses and credited the contribution revenue as it also increased the revenue
The cost of capital for a firm with a 60/40 debt/equity split, 4.86% cost of debt, 15% cost of equity, and a 35% tax rate would be:______.
Answer: 7.9%
Explanation:
The weighted cost of capital for a firm shows the cost of capital from all sources that fund the business including stock and long term liabilities.
Formula is:
= (Weight of equity * cost of equity) + (Weight of debt * (cost of debt * (1 - tax rate) ))
= (0.4 * 0.15) + ( 0.6 * ( 0.0486 * ( 1 - 35%)))
= 0.06 + 0.018954
= 7.895%
= 7.9%
_____ can be calculated as the percentage of workers who remain in a firm from one point in time to another point in time.
Answer: Retention rate
Explanation:
Retention rate refers to the percentage of customers that are retained by a business for a given period of time.
Retention rate is usually calculated on an annual basis. It can be calculated as the percentage of workers who remain in a firm from one point in time to another point in time.
The Federal Reserve mandates banks and thrifts to deposit in their regional Federal Reserve Bank a fraction of their checkable deposits as:
Answer:
Required Reserves
Explanation:
Fractional banking is a banking system where a portion of customer's deposits is kept as reserves while remaining portion is lent out. The amount kept as reserves is determined by the required reserve ratio set by the Central bank.
Reserves is the total amount of a bank's deposit that is not given out as loans
Reserves = Deposits - outstanding loans
$100,000 - $70,000 = $30,000
there are 2 types of reserves
1. Required reserves is the percentage of deposits required of banks to keep as reserves by the central bank
Required reserves = reserve requirement x deposits
0.2 x $100,000 = $20,000
2. Excess reserves is the difference between reserves and required reserves
$30,000 - $20,000 = $10,000
Chavez Corporation reported the following data for the month of July: Inventories: Beginning Ending Raw materials $ 36,000 $ 34,500 Work in process $ 20,500 $ 26,000 Finished goods $ 36,500 $ 51,500 Additional information: Raw materials purchases $ 70,500 Direct labor cost $ 95,500 Manufacturing overhead cost incurred $ 63,500 Indirect materials included in manufacturing overhead cost incurred $ 9,800 Manufacturing overhead cost applied to Work in Process $ 62,500 Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold. The cost of goods manufactured for July is:
Answer:
Cost of goods manufactured= $214,700
Explanation:
First, we need to calculate the direct material used:
Direct material used= beginning inventory + purchases - ending inventory
Direct material used= 36,000 + 70,500 - 34,500
Direct material used= $72,000
Now, we can determine the cost of goods manufactured:
cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP
cost of goods manufactured= 20,500 + 72,000 + 95,500 + (62,500 - 9,800) - 26,000
cost of goods manufactured= $214,700
Glen Pool Club, Inc., has a $150,000 mortgage liabilty. The mortgage is payable in monthly installments of $1,543 , which include interest computed at an annual rate of 12 percent (1 percent monthly). Prepare a partial amortization table showing (1) the original balance of this loan, and (2) the allocation of the first two monthly payments between interest expense and the reduction in the mortgage`s unpaid balance. Prepare the journal entry to record the second monthly paymment. Will monthly interest increase, decrease or stay the same over the life of the loan? Explain.
Answer:
Glen Pool Club, Inc.
1. Monthly Pay: $1,542.92
2. Monthly Amortization Schedule
Monthly Amortization Schedule
Date Beginning Balance Interest Principal Ending Balance
1 7/2021 $150,000.00 $1,500.00 $42.92 $149,957.08
2 8/2021 $149,957.08 $1,499.57 $43.35 $149,913.73
3. Journal Entry:
Debit Interest $1,499.57
Debit Mortgage Liability $43.35
Credit Cash $1,542.92
To record the second monthly payment.
4. Monthly interest will continue to decrease over the life of the loan because part of the principal is being repaid with each monthly payment. Therefore, the next monthly balance will reduce. It is with this monthly balance that the interest for the month is computed. So, interest will continue to decrease.
Explanation:
a) Data and Calculations:
Mortgage liability = $150,000
Monthly installment payment = $1,543
Annual interest rate = 12%
Monthly Pay: $1,542.92
Home Price 150000
Down Payment 0 %
Loan Term 30 years
Interest Rate 12
Calculate
Monthly Pay: $1,542.92
Total of 360 Mortgage Payments $555,450.80
Total Interest $405,450.80
One thousand dollars is invested at 5% continuous annual interest. this means the value of the investment will grow exponentially, with k equaling the decimal rate of interest. What will the value of the investment be after 7 1/2 years?
a. $1, 375.00.
b. $375.00.
c. $1, 454.99.
d. $454.99.
Compute the payback period for a project that requires an initial outlay of $297,771 that is expected to generate $40,000 per year for 9 years.
Answer:
7.44
Explanation:
The computation of the payback period is given below:
Time Amount Cumulative
0 (297,771) (297,771)
1 40,000 (257,771)
2 40,000 (217,771)
3 40,000 (177,771)
4 40,000 (137,771)
5 40,000 (97,771)
6 40,000 (57,771)
7 40,000 (17,771)
8 40,000 22,229
9 40,000 62,229
Now the payback period is
=7 + (17,771 ÷ 40,000)
= 7.44
Marlow Company purchased a point of sale system on January 1 for $6,500. This system has a useful life of 5 years and a salvage value of $950. What would be the depreciation expense for the second year of its useful life using the double-declining-balance method
Answer:
$1,560
Explanation:
The computation of the depreciation expense for the second year of its useful life is shown below:
First depreciation rate is
= 1 ÷ 5 ×2
= 40%
Now the depreciation expense for one year is
= 40% of $6,500
= $2,600
Now the depreciation expense for the second year is
= ($6,500 - $2,600) ×40%
= $1,560
A company has these balances as of december 31
cash 20000 fixed assets 35000 accumulated depreciation 20000 accounts payable 5000
what are the total assets?
Answer:
Total asset = 55000
Explanation:
Below is the following calculations:
Cash amount = 20000
Fixed assets = 35000
Accumulated depreciation = 20000
Accounts payable = 5000
The total assets = Cash + fixed assets
Total asset = 20000 + 35000
Total asset = 55000
Not- Accumulated depreciation should be deducted from the gross assets.
The cost of land includes all of the following except:___.
a. cost of leveling and grading.
b. payments to clear liens.
c. purchase price.
d. cost of fencing and lighting.
Answer:
The answer is D.
Explanation:
The correct option is D. -The cost of fencing and lighting is not part of the cost of land. Why? - Because this is the cost to improve land.
Option A is wrong. Cost of levelling and grading is part of the cost of land
Option C is wrong. Purchase price is the main cost in the determining the cost of land
Option D is also wrong
would you recommend that accountants wait until collections are made from customers before recording sales revenue
Answer: No
Explanation:
Accounting currently uses the Accrual basis and this is the best basis to use so far because it records revenue when they are earned not when the actual money comes in.
In doing this, the company is able to properly ascertain the revenue that it made in a particular period. If a company were to wait until collections were made, the company might wait for over one period to record their sales which would not be very helpful in calculating income for the period.
Also if companies waited to record only after sales, people not paying and becoming doubtful debts become a headache to record.
True or false. The primary functions of price in a free market are to inform, direct, and motivate consumers and firms.
Answer:
True
Explanation:
Prices in a free market co-ordinate the buying and selling decisions in the market. In their rationing role, prices inform the distribution of goods and other resources throughout the economy. Prices motivate firms by acting as incentives that provide a standard of measure of value throughout the world. Prices direct producers and consumers, thereby acting as signals to educate producers and consumers on how to adjust their production and consumption decisions.
You invested 50% of the wealth in stock A and the remaining 50% in stock B. The expected rates of returns on A and B are given below: Year Expected return on A Expected return on B 2000 14% 16% 2001 15% 17% 2002 16% 18%2003 17% 19%Find the standard deviation of the portfolio. A. 0.955%.B. 1.291%.C. 1.697%.D. 2.124%.E. 2.890%.
Answer:
B. 1.291%
Explanation:
The computation of the standard deviation is shown below;
= 2000 + 2001 + 2002 + 2003
= 0.5 × 14% + 0.5 × 16% + 0.5 × 15% + 0.5 × 17% + 0.5 × 16% + 0.5 × 18% + 0.5 × 17% + 0.5 × 19%
= 15% + 16% + 17% + 18%
= stdev( 15% + 16% + 17% + 18%)
= 1.291%
Hence, the correct option is b.
List three ways in which individual debt differs from government debt.
Answer:
Government debt is larger.
Government usually borrows significantly more debt than an individual can because it is to be used to run many more things than an individual would be able to.
Government debt is less risky.
The government is able to fall back on the assets of the entire country as well as print money to be able to pay off debt. There are therefore less chances of the government defaulting so its debt is less risky.
Government debt can keep borrowing even though it is in debt.
There is a certain level of debt that individuals are allowed to have and then credit holders would refuse to give them more. This is not the case for the government which can keep on borrowing even though it already owes a significant amount of debt.
LB Limited is a price taker in a perfectly competitive market. It produces and sells canned spices. The following information is available for the company: Current output 5000 units Current market price $3 Total cost $25,000 Marginal cost $3 Total variable cost $20,000 What is the best action for LB limited? a) Operating in the short run and in the long run b) Increase output in the short run and in the long run c) Shut down in the short run and exit in the long run d) Shut down in the short run and produce in the long run e) Reduce output in the short run and increase output in the long run
Answer:
The answer is "Option c".
Explanation:
In this question c, the short-term Shut - down as well as the long-term departure. Since overall revenues are lower than the entire variable cost, it means that a producer is not capable of covering the variable cost, thus stopping the output in the short term and the business leaving it market on account of losses inside the long term.
The following is a list of various costs of producing T-shirts. Classify each cost as either a variable, fixed, or mixed cost for units produced and sold.
a. Ink used for screen printing Variable
b. Warehouse rent of $8,000 per month plus $0.50 per square foot of storage used Mixed
c. Thread Variable
d. Electricity costs of $0.038 per kilowatt-hour Variable
e. Janitorial costs of $4,000 per month Fixed
f. Advertising costs of $12,000 per month
g. Accounting salaries
h. Color dyes for producing different colors of T-shirts Variable
i. Salary of the production supervisor
j. Straight-line depreciation on sewing machines Fixed
k. Salaries of internal pattern designers
l. Hourly wages of sewing machine operators Variable
m. Property taxes on factory, building, and equipment Fixed
n. Cotton and polyester cloth
o. Maintenance costs with sewing machine company (the cost is $2,000 per year plus $0.001 for each machine hour of use.) Mixed
B) Magnolia, Inc. manufactures bedding sets. The budgeted production is for 31,800 comforters this year. Each comforter requires 7 yards of material. The estimated January 1 beginning inventory is 5,320 yards with the desired ending balance of 4,100 yards of material. If the material costs $6.80 per yard, determine the materials budget for the year.
$_______
C) Gleason invested $90,000 in the James and Kirk partnership for ownership equity of $90,000. Prior to the investment, land was revalued to a market value of $425,000 from a book value of $200,000. James and Kirk share net income in a 1:2 ratio.
a. Provide the journal entry for the revaluation of land. If an amount box does not require an entry, leave it blank.
b. Provide the journal entry to admit Gleason.
D) If the contribution margin ratio for France Company is 37%, sales were $413,000, and fixed costs were $106,000, what was the income from operations?
$152,810
$106,000
$37,448
$46,810
E) Cash and accounts receivable for Adams Company are provided below:
Current Year Prior Year
Cash $70,000 $50,000
Accounts receivable (net) 70,400 80,000
Based on this information, What is the amount and percentage of increase or decrease that would be shown with horizontal analysis?
Account Dollar Change Percent Change
Cash $ %
Accounts Receivable $
%
Answer:
A. Production and Sales Cost Classification:
Variable
a. Ink used for screen printing
c. Thread
d. Electricity costs of $0.038 per kilowatt-hour
h. Color dyes for producing different colors of T-shirts
k. Salaries of internal pattern designers
l. Hourly wages of sewing machine operators
n. Cotton and polyester cloth
Mixed
b. Warehouse rent of $8,000 per month plus $0.50 per square foot of storage used
o. Maintenance costs with sewing machine company (the cost is $2,000 per year plus $0.001 for each machine hour of use.)
Fixed
e.Janitorial costs of $4,000 per month Fixed
f. Advertising costs of $12,000 per month
g. Accounting salaries
i. Salary of the production supervisor
j. Straight-line depreciation on sewing machines
m. Property taxes on factory, building, and equipment
B. The materials budget for the year is:
= $1,505,384.
C. James, Kirk, and Gleason Partnership
Debit Land $225,000
Credit Land revaluation gain $225,000
To record land revaluation.
a. Debit Land Revaluation gain $225,000
Credit James, capital $75,000
Credit Kirk, Capital $150,000
To share the revaluation gain.
b. Debit Cash $90,000
Credit Gleason, Capital $90,000
To record Gleason's admission as a partner.
Debit James, Capital $30,000
Debit Kirk, Capital $60,000
Credit Cash $90,000
To reduce James and Kirk's capital accounts.
D. France Company
Income from operations = $46,810
E. Adams Company:
Account Dollar Change Percent Change
Cash $20,000 40%
Accounts Receivable ($9,600) (12%)
Explanation:
a) Data and Calculations:
A) Variable costs vary in total and are fixed per units. Fixed costs vary per units but are fixed in total within the relevant production capacity. Mixed costs have variable and fixed costs combined.
B) Magnolia, Inc.
Budgeted production of comforters for this year = 31,800
Materials required by each comforter = 7 yards
Total materials required for production =222,600 (31,800 * 7)
Beginning inventory = 5,320 yards
Ending balance = 4,100 yards
Total materials to be bought = 221,380 (222,600 + 4,100 - 5,320)
Material costs $6.80 per yard
Materials budget for the year = $1,505,384 (221,380 * $6.80)
$_______
C) Gleason invested $90,000 in the James and Kirk partnership for ownership equity of $90,000.
Land $225,000
Land revaluation $225,000
a. Land Revaluation $225,000
James, capital $75,000
Kirk, Capital $150,000
b. Cash $90,000 Gleason, Capital $90,000
James, Capital $30,000 Kirk, Capital $60,000 Cash $90,000
D) France Company
Contribution margin ratio = 37%
Sales $413,000
Contribution margin = $152,810 ($413,000 * 37%)
Fixed costs $106,000
Income from operations = $46,810
E) Adams Company:
Current Year Prior Year
Cash $70,000 $50,000
Accounts receivable (net) 70,400 80,000
Account Dollar Change Percent Change
Cash $20,000 40%
Accounts Receivable ($9,600) (12%)
Hillside Manufacturing Company uses 2,000 units of bearings per year. The bearings are purchased from a supplier in Florida. The following information is known for the problem:
Annual demand, D 2.000 units $10
Purchase price per unit, P
Holding cost per unit per year expressed as a percent of per-unit purchase price 20% $125
Ordering cost per order. S
Lead time. L 6 days 250
Number of working days per year
Answer the following questions. Write your final answer only (without intermediate steps) for the fill-in-the-blank questions.
Question 2 (2 points) The holding cost (H) = $ A/ per unit per year. Use 2-decimal accuracy for the final answer, e.g., 0.12, when necessary.
Question 3 (2 points) The economic order quantity (EOQ) = units. Round the final answer (if it is not an integer) to the nearest integer.
Question 4 (2 points) Based on the EOQ, the average inventory = A units. Round the final answer (if it is not an integer) to the nearest integer.
Question 5 (2 points) A/ Total annual inventory holding cost = $ . Round the final answer (if it is not an integer) to the nearest integer.
Question 6 (2 points) The optimal number of orders per year = A orders. Round the final answer (if it is not an integer) to the nearest integer.
Question 7 (2 points) Total annual inventory cost (excluding the purchase cost) = $ A Round the final answer (if it is not an integer) to the nearest integer
Question 8 (2 points) A units. Round Reorder point (ROP) = the final answer (if it is not an integer) to the nearest integer.
Question 9 (2 points) If the management decides to order 2,000 units (instead of the EOQ quantity obtained above) per order, the total annual inventory cost (excluding the purchase cost) = $ A Round the final answer (if it is not an integer) to the nearest integer.
Answer:
2. holding cost is $2
3. EOQ = 500 units
4. Average inventory = 250units
5. total annual hoding cost = $500
6. number of orders is 4
7. total annual inventory = $1000
8. reorder point = 48
9. $2125
Explanation:
2. holding cost = 20% * $10
the holding cost is 20 percent of the purchase price for each unit
= 0.2*10
= $2.00
3. the EOQ
= 2*2000*$125/$2
= 250000
[tex]EOQ=\sqrt{250000}[/tex]
= 500 units
4.average inventory = EOQ/2
= 500/2 = 250 units
5. total annual hoding cost = average inventory * holding cost
= 250*2
= $500
6. number of orders= 2000 units/EOQ
= 2000/500
= 4 0rders
7. total annual inventory cost = ordering cost annual + holding cost annual
ordering annual cost = 2000/500*125
= 500
total annual inventory cost = 500 + 500 = $1000
8. reorder point
wwe first calculate the daily demand; = 2000/250 = 8
ROP = 8*6 = 48
9. annual ordring = 2000/2000 * 125
= $125
annual holding = 2000/2 * holding cost of $2
= $2000
total annual inventory = 125 + 2000
= $2125
