Reference no: EM132928295

Question -

Q1 - The following projected 2021 figures were provided to you by the Makisig Company for analysis

Sales (90% on credit) P 8,450,000   

Cost of goods sold 3,456,750   

Operating expenses 1,735,640

Depreciation and non-cash charges included in Cost of goods sold P 210,000     

Operating expenses 84,500

The company operates on a 6 working days week or 310 operating days annually.

a. Minimum cash balance for two weeks?

b. Average collection period if the accounts receivable on the average amounted to P422,500?

c. If receivable turnover increased by 10%, by how much would the receivable balance change?

Q2 - The Sweet Haven Restaurant uses 7,800 boxes of napkins annually which it buys at P25 per box. The estimated cost per order is P54 while the annual inventory carrying charge is 8 percent of the average cost per box of napkins.  The company operates on a 300 days annually.

a. How many boxes should be bought per order, to minimize total costs?

b. How much is the total ordering cost and carrying cost?

c. If the restaurant requires a safety stock of 100 boxes and the supplier need a 10-day delivery time, at what level of stocks should the firm reorder? Assume a steady rate of usage.