What will its average inventory level be during the year

Assignment Help Accounting Basics

Reference no: EM13130642

A firm expects to sell 10,000 units of its product annually. It estimates that it costs $200 to place an order and that each unit costs $7 annually to carry in inventory. It takes 7 days to receive an order once it is placed, and the store is open 365 days per year.

a) How many units should the firm order at a time if it wants to minimize the sum of ordering and carrying costs?

b) How many orders will it place in a year?

c) What will its average inventory level be during the year?

d) What is its reorder point?

Reference no: EM13130642

Questions Cloud

Adding fractions with calculator : Several calculators are now available that do computations in fractional form as well as in decimal form. Some of these automatically give results in simplest terms.

Compute the amount of gross profit to be recognized : Compute the amount of gross profit to be recognized in each of the three years. (Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

Attribute sampling plan-determining large expenditures : An auditor uses an attribute sampling plan to determine whether large expenditures are being properly approved. The auditor is willing to accept a 2% risk of assessing control risk too low, and has a tolerable rate of 5%.

Explain the process used to obtain the results : Perform an appropriate hypothesis test, showing the necessary calculations and/or explaining the process used to obtain the results.

What will its average inventory level be during the year : A firm expects to sell 10,000 units of its product annually. It estimates that it costs $200 to place an order and that each unit costs $7 annually to carry in inventory. It takes 7 days to receive an order once it is placed, and the store is open..

Identify and draw the structures of two simpler compounds : What simple compund reacts with carboxylic acid to make lidocaine? Identify and draw the structures of two simpler compounds one from which should be a carboxylic acid, from which you could make lidocaine.

What mass of silver metal will be produced : A total charge of 96.5 kC is passed through an elctrolytic cell. What mass of silver metal will be produced from a silver nitrate solution?

Explain the differences in operating income : There are no price, efficiency, or spending variances, and any production-volume variance is directly written off to cost of goods in the quarter in which it occurs.

Determining when firms are allowed to elect the fair value : Is IFRS or U.S. GAAP more restrictive for determining when firms are allowed to elect the fair value option for financial assets and liabilities? Explain.

User Account

All Pages