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Question - Fisk Corporation is trying to improve its inventory control system and has installed an online system at its retail stores. Fisk anticipates sales of 48,400 units per year, and ordering cost of $12 per order, and carrying costs of $1.50 per unit. In the second year, Fisk Corporation finds that it can reduce ordering costs to $3 per order, but carrying costs will stay the same at $1.50 per unit.
a-1. What is the economic ordering quantity for the second year?
a-2. How many orders will be placed during the second year?
a-3. What will the average inventory be for the second year?
a-4. What is the total cost of ordering and carrying inventory for the second year?
What are all the related journal entries including: Credit sales, Collection of cash, Write-off of bad debt and Recognizing the bad debt expense
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