Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
In the quantity discount model in Example 12.2, the minimum total annual cost is obtained by ordering enough to achieve the smallest unit purchasing cost. Evidently, the larger unit purchasing costs for smaller order quantities make them unattractive. Could an order quantity below 400 ever be best? Could an order quantity between 500 and 800 ever be best? To answer these questions, assume that there is no price break at all. Specifically, assume that the unit purchase cost is always $26. What is the optimal order quantity with this assumption? How does this help answer the preceding questions?
Example 12.2
ORDERING THUMB DRIVES WITH QUANTITY DISCOUNTS AT AJ TAYLOR
The accounting firm of AJ Taylor buys USB thumb drives from a distributor of PC supplies. The firm uses approximately 5000 drives per year at a fairly constant rate. The distributor offers the following quantity discount. If fewer than 500 drives are ordered, the cost per drive is $30. If at least 500 but fewer than 800 drives are ordered, the cost per drive is $28. If at least 800 drives are ordered, the cost per drive is $26. The fixed cost of placing an order is $100. The company's cost of capital is 10% per year, and there is no storage cost. The firm wants to find the optimal order quantity and the corresponding total annual cost.
Objective To find the order quantity that minimizes the total annual cost of ordering in the face of quantity discounts.
which of the following terms is used to identify the process of expense recognition for property plant and
Blue Company sold machinery for $45,000 on December 23, 2010. The machinery had been acquired on April 1, 2008, for $49,000 and its adjusted basis was $14,200. The § 1231 gain, § 1245 recapture gain, and § 1231 loss from this transaction are:
- Prepare an income statement showing departmental contribution margin based on the following: Dept. X Dept. Y Rent Expense, Space (square feet) 17,500 35,000, Net Sales $60,000 $40,000 and Cost of Goods Sold 18,000 16,000
elysian fields inc. uses a maximum payback period of 6 years and currently must choose between two mutually exclusive
Assume Green Leaf Nursery anticipated sales of $500 in the first quarter. Accounts receivable at the beginning of the year was $300. Assuming a collection period of 30 days, which is the approximate beginning balance for the second quarter?
What is the operating cash flow for 2015?
you are thinking of investing in a field that may have commercial amounts of oil. based on the existing data of the
Marie's Decorating produces and sells a mantel clock for $100 per unit. In 20X5, 100,000 clocks were produced and 80,000 were sold. Other information for the year includes: What is the inventoriable cost per unit using variable costing?
stein company makes carpets. a customer wants to place a special order for 1000 carpets in navy blue with the company
a. linetech companys bank statement showed an endingbalance of 8000. items appearing in the bank reconciliationincluded
the following amortization and interest schedule reflects the issuance of 11-year bonds by capulet corporation on
On Dec.1 declared a $0.50 Per share cash dividend to shockholders of record on Dec.14, payable January 10, 2010. Why is cash and Paid in capital from Treasury stock, both debit?
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd