Compute the annual inventory carrying costs

Assignment Help Financial Accounting
Reference no: EM132938699

Question - Based on an EOQ analysis (assuming a constant demand), the optimal order quantity is 2,500. The company desires a safety stock of 500 units. A 5-day lead time is needed for delivery. Annual inventory carrying costs equal 25% of the average inventory level. The company pays P4 per unit to buy the product, which it sells for P8. The company pays P150 to place a detailed order, and the monthly demand for the product is 4,000 units. Compute for the annual inventory carrying costs. 

A firm has daily cash receipts of P300,000. A bank has offered to provide a lockbox service that will reduce the collection time by three days. The bank required a monthly fee of P2,000 for providing this service. If monthly rates are expected to average 6% during the year, what is the additional annual income (loss) of using the lockbox system?

Reference no: EM132938699

Questions Cloud

Prepare journal entry required to record the transactions : On December 6, Year 1, Griggs sold $6,300 of merchandise to the Hillman Company. Prepare journal entry required to record the transactions
Calculate margin of safety : Question - Calculate margin of safety from the following details: Sales 12,00,000, Contribution 600000, Fixed costs 4,00,000
Calculate the price expense : At January 1, 2008 supplies on hand were 2,000. At December 31, 2008 supplies on hand are 2,500. Calculate the price expense for 2008
What is the value of ending inventory using full costing : In addition, the company has fixed selling and administrative costs of $162,600 per year. What is the value of ending inventory using full costing
Compute the annual inventory carrying costs : e company pays P150 to place a detailed order, and the monthly demand for the product is 4,000 units. Compute for the annual inventory carrying costs
What is the allowance for doubtful accounts : Estimated sales discounts at December 31, 2018 25,000 1% of net credit sales is estimated to be uncollectible. What is the allowance for doubtful accounts
What is the dl hours variance : Given the following information for direct labor - Standard hours = 4.0. Actual Wage = $10.00 per hour. What is the DL Hours Variance
What should be the balance of the discount on notes payable : What should be the balance of the Discount on Notes Payable account on the books of Ivanhoe at December 31, 2021 after adjusting entries are made
What are the dividends received by preferred stockholders : The board of directors declared and paid a $3500 dividend in 2020. In 2021, $23200 of dividends are declared and paid. What are the dividends received

Reviews

Write a Review

Financial Accounting Questions & Answers

  Decision to eliminate an unprofitable segment

Which of the following is irrelevant to the decision to eliminate an unprofitable segment?

  Discuss the economic implications of the event

Describe the event and discuss the economic implications of this event. What economic effects might this have at the individual and societal levels?

  What is the maturity risk premium for the two-year security

Inflation is expected to be 2% for the next 2 years. A 2-year Treasury security yields 8.1%. What is the maturity risk premium for the 2-year security?

  Which the materials price variance is favorable

What about the situation in which the materials price variance is favorable and the materials quantity variance is unfavorable? How would you explain that situation?

  Prepare payoff chart and pay off table for straddle option

Prepare the payoff chart and pay off table for Straddle option Strategy by using the Premium of at the money call option and Current Market price of Nifty

  How much revenue should be recognized by the Pharoah Lawns

How much revenue should be recognized by the Pharoah Lawns Co. in each of the months of March, April, May, June, July, August, and September

  Calculate Amy net pay

Calculate Amy's net pay based on the following: Commissions: 2% of sales over $15,000, Withholding: 13% and Hourly Rate: $10.25

  Valuation of plant asset

Valuation of plant asset - What amount if any will Hi-Tech record as goodwill on the date of purchase?

  What was dividend yield

After the dividend is paid to be $113, what toal return will you have earned over the year? What was your dividend yield? Your capital gain rate?

  How much does have to place at the end of each year

How much does he have to place at the end of each year into a retirement account earning 15 percent per year in order to have an adequate retirement

  Determine the cost of units in ending work in process

The charges to Work in Process—Baking Department for a period as well as information concerning production are as follows. The Baking Department uses the average cost method, and all direct materials are placed in process during production. Determine..

  What is the highest price house can afford

If you spend 32% of your monthly salary towards a house, what is the highest price house you can afford? What is the highest priced house a high school

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd